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Lawsuit claims Steve Jobs, senior Apple directors hurt company with anti-poaching row

post #1 of 71
Thread Starter 
Piling onto Apple's anti-poaching courtroom saga, a new lawsuit seeks damages on behalf of shareholders for financial losses related to alleged misconduct by senior directors, including late cofounder Steve Jobs and current CEO Tim Cook.


Apple "Hands Off (Do Not Call List)" from 2009.


Filed with the U.S. District Court for the Northern District of California this week, the derivative shareholder complaint prepared by attorneys for plaintiff R. Andre Klein accuses Apple senior directors and officers of "breach of fiduciary duty, gross mismanagement, corporate waste, and breach of the duty of honest services."

Individual defendants, including Jobs and Cook, allegedly caused the company to violate antitrust laws, issue false and misleading financial proxy statements and stifle worker wages, according to the argument. As a result, Apple, which must be included alongside Klein and shareholders as a nominal defendant, was harmed by being forced into a time and asset consuming settlement with the U.S. Department of Justice in 2010, as well as an ongoing class action lawsuit leveled by a group of employees. Further, the company's reputation suffered, as did innovation.

In sum, defendants' actions allegedly forced Apple to spend a huge amount on expenditures related to "years of lost opportunities to hire more qualified employees that were employed at other companies; costs incurred from defending and paying a settlement in the class action for violation of antitrust laws; costs incurred from defending and settling allegations by the Department of Justice; and loss of reputation."

Klein's complaint builds on accusations from a class of former employees currently arguing that Apple endorsed anti-solicitation agreements designed to end worker poaching between top Silicon Valley firms Adobe, Google and Intel.

A large part of the filing points to discoveries made in the separate but related court case, including a recent decision by presiding Judge Lucy Koh to deny a proposed $324.5 million collective settlement offer. In the order handed down last week, Judge Koh identified Jobs as "a, if not the, central figure in the alleged conspiracy," based on witness depositions.

JobsSteve Jobs at the iPad 2's unveiling.


Also included as exhibits are a number of emails previously divulged as part of the High-Tech Employee Antitrust Litigation proceedings under Judge Koh. Highlighted among these is correspondence between Jobs and other tech moguls like Google's Sergey Brin and Eric Schmidt.

On the other end of the spectrum is an email from former Palm CEO Edward Colligan, one of the few voices of dissent who framed Jobs' tactics as "likely illegal." The Colligan affidavit, which suggests Jobs threatened to slap Palm with a patent suit if the company poached an Apple employee, came to light in 2013.

Additionally, press releases and media reports about Apple and its involvement in the anti-solicitation scandal are cited in Klein's complaint.

Defendants named include current CEO Tim Cook, former Chairman of Apple's board William Campbell, former CFO Fred Anderson and board members Mickey Drexler, Art Levinson, Bob Iger and Andrea Jung. In addition, 30 unknown "doe defendants" are cited, the identities of whom will be investigated if the suit moves to the discovery phase.

post #2 of 71
I can see how this anti-poaching law hurts employees and is unethical but I don't see how it hurts shareholders.

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"The real haunted empire?  It's the New York Times." ~SockRolid

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post #3 of 71
So filling a suit against the company you are a shareholder of and its management will now benefit the shareholder?
post #4 of 71
OK, so they filed a complaint. What do they actually want? Surely they have something in mind?
post #5 of 71
Quote:
Originally Posted by EricTheHalfBee View Post

OK, so they filed a complaint. What do they actually want? Surely they have something in mind?
Money and lots of it.
post #6 of 71
I think I'll organize a class action suit based in the extra amount I had to pay for my iPod Nano in 2007 because of the anti-poaching policy.

Any takers?
post #7 of 71
Quote:
Originally Posted by Fred1 View Post

I think I'll organize a class action suit based in the extra amount I had to pay for my iPod Nano in 2007 because of the anti-poaching policy.

Any takers?

I'd take your offer...

It's just that I made an agreement with somebody else not to.
There's nothing your wife/girlfriend/partner wouldn't like more than a 6 Plus...
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There's nothing your wife/girlfriend/partner wouldn't like more than a 6 Plus...
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post #8 of 71

Wow. This country is heading into the crapper. 

post #9 of 71
So, They're basically suing themselves to get more money. Hmm
And they're about to get paid for the stock increase.
Greedy bastards. LOL
post #10 of 71
So they are suing Apple because Apples' conduct got them sued? And the fact that they were sued was a waste of time and money - so to rectify the situation they are going to sue Apple?
post #11 of 71
Wow, talk about the sense of entitlement.

"Apple should pull the plug on the iPhone."

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"Apple should pull the plug on the iPhone."

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post #12 of 71
Specious claims, as: "defendants' actions allegedly forced Apple to spend a huge amount on expenditures related to "years of lost opportunities to hire more qualified employees that were employed at other companies".
This is nothing but a claim based on...nothing, saying IF Apple could have poached, they would have been more profitable? Is that a crystal ball prediction? One could easily argue the opposite considering Apple's financial growth over a longer period.
Edited by pacificfilm - 8/15/14 at 1:57am
post #13 of 71
Shareholder suits are ridiculous anyway, although this one is against Job's estate not the company.

It's going to be hard to argue that Steve jobs destroyed shareholder value or that reducing employee wages also harms shareholders, their employers.
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I wanted dsadsa bit it was taken.
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post #14 of 71

A bunch of greedy lawyers trying to make money.  This case should be thrown out.

post #15 of 71
This Andre Klein sounds like a pathetic piece of shit, as is this lawsuit. The lawsuit is both utterly moronic, as well as non sensical and completely classless (ie. Suing the now dead Steve Jobs for "harming" the company). He's basically suing them for getting sued. Something straight from the onion.
post #16 of 71
Quote:
Originally Posted by richlo View Post

So filling a suit against the company you are a shareholder of and its management will now benefit the shareholder?
. No. It will benefit the person who filed suit and the layers.
post #17 of 71
Quote:
Originally Posted by CustomTB View Post


. No. It will benefit the person who filed suit and the layers.

How does it benefit the layers? What layers? 

post #18 of 71
Success breeds comtempt.
I don't care about what the ignorant masses perceive as truth. I'm concerned with the facts on the ground.
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I don't care about what the ignorant masses perceive as truth. I'm concerned with the facts on the ground.
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post #19 of 71
Quote:
Originally Posted by SolipsismX View Post

I can see how this anti-poaching law hurts employees and is unethical but I don't see how it hurts shareholders.

I guess the argument is that the executives acted inappropriately and illegally, which was not sanctioned by shareholders, and thereby brought legal action which resulted in punitive fines, which affect shareholder value.  If the punitive fines, and any associated loss of reputation, are greater than the advantage granted by the executive action then the shareholders have a net loss in value.

 

I'm not sure exactly how it works, but I think that's pretty reasonable, and would appear to be an effort to shift the blame to where it should lie rather than just "on Apple, the company".  The outcome of the legal battle punished the company in the form of a fine, but that's not something that really affects the executives that were responsible.

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post #20 of 71
There is a potentially infinite recursion here. If they win, they'll have shown yet further damage to Apple, and can sue again, wash, rinse, repeat.
post #21 of 71

I am usually pretty good at looking at both sides, however, in this case I am struggling to understand how shareholders lost value because Apple was attempting to keep employee's salary in check and did not get into a bidding war with every company in the valley to hire people. 

 

If anything keeping wages in check helped shareholders since it kept operating costs down thus a higher return on investments. Unless these people think the dump in the stock value had something to do with what Apple and other companies were doing. But not every companies stock went down. 

 

I personally do not see this getting very far in the court system. I think they will struggle to draw a connection between the anti-poaching and lost shareholder value. I think the judge will toss this is they can make the solid connection.

 

They would have to show the stock tank because of this news or it could have been this price if the new did not come out. We all know the current trading value of Apple does not really take in to consideration the money they have in the bank. Actually having too much money in the bank has actually hurt them so paying a fine and reducing the amount of money should help things in the investment world.

post #22 of 71
Sigh... More bloodsuckers coming to feed.
post #23 of 71
Quote:
Originally Posted by MattBookAir View Post

There is a potentially infinite recursion here. If they win, they'll have shown yet further damage to Apple, and can sue again, wash, rinse, repeat.

 

Sounds like a law firm's wet dream.

 
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post #24 of 71

Some of you seem to be misunderstanding.  Apple is not being sued by its shareholders.  Apple's shareholders and Apple, are suing the individual executives responsible for the non-poaching agreements.

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post #25 of 71
Lawyers.
What do you call 1000 lawyers at the bottom of the ocean? A good start.

The eventual fine will likely be just a week's worth of Apple's profit. Hardly damaging to Apple's finances.
post #26 of 71
These are just vultures who know that Apple is sitting on a pile of cash and want to do whatever they can to get a piece of it.
post #27 of 71
Quote:
Originally Posted by Crowley View Post
 

Some of you seem to be misunderstanding.  Apple is not being sued by its shareholders.  Apple's shareholders and Apple, are suing the individual executives responsible for the non-poaching agreements.

Wrong, read the complain linked in this article. Apple is a defendant.

 

R. ANDRE KLEIN, on behalf of himself and all other stockholders of APPLE INC., Plaintiff,
vs. 
TIMOTHY D. COOK, WILLIAM V. CAMPBELL, MILLARD (“MICKEY”) DREXLER, ARTHUR D. LEVINSON, ROBERT A. IGER, ANDREA JUNG, FRED D. ANDERSON, ESTATE OF STEVEN P. JOBS, deceased, and DOES 1-30, inclusive, Defendants,
- and – 
APPLE INC., a California corporation,  Nominal Defendant.

 

The problem is Klein doesn't speak for me and I am an AAPL stockholder, therefore, I take exception to his lawsuit and should organize a countersuit against Klein for thinking he could include all the other stockholders in this lawsuit without their consent.

post #28 of 71
Quote:
Originally Posted by TBell View Post

How does it benefit the layers? What layers? 

As Shakespeare said, "kill all the 'layers'"... ☕️

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #29 of 71
As several posters have pointed out, it makes no sense for shareholders to sue a company for making bad decisions, as they are just suing themselves. However -- if some shareholders are participants in the class-action, while others are not, then the suit makes sense as a way for the participants to fleece the non-participants.
post #30 of 71
Quote:
Originally Posted by SolipsismX View Post

I can see how this anti-poaching law hurts employees and is unethical but I don't see how it hurts shareholders.

I don't agree, especially about the unethical part. I see poaching as being more unethical than anti-poaching. A company spends a lot of time and money training an employee then a competitor "steals" that employee, getting a trained employee with information about the company that trained them. The money the company spends to buy this person is nothing compared to the money the original company spent to train them. The sad thing is people can be bought for so little money compared to the amount that was spent on them just in training. As most professional athletes find out, the grass is not always greener with another team and their short-term financial gain doesn't usually equate to the long-term gain in a championship (equate this to the success of a different company). Apple and the others wouldn't have engaged in this type of behavior if employees had any commitment to the companies that hired them. Employees always had the option of quitting Apple and seeking employment elsewhere, the other companies just couldn't go out and actively recruit employees from the other companies. If the other company didn't hire them, that sucks but this happens to everyone without valid reasons. Companies just can't deny employment based on specific racial, gender, and other things. Previous employment isn't necessarily included.

 

I agree with you about the lack of damage to stockholders. What these companies were doing was helping their bottom line not endangering it so this lawsuit doesn't make any sense in the first place.

post #31 of 71
Quote:
Originally Posted by AppleSauce007 View Post
 

A bunch of greedy lawyers trying to make money.  This case should be thrown out.

 

Yeah, but there's almost always some settlement because it's very expensive to defend this even when it has no merit.  But the lawyers get almost all the money and the shareholders get almost nothing.   For stocks that I own, I get these class action lawsuit settlement documents in the mail all the time.   If you get anything, it usually works out to about 7 cents a share, and 99% of the time, it's not worth my time to fill out the paperwork and provide proof of the stock purchases and sales.    I bet I get about 50 of these a year and I'm a relatively small investor. 

 

I bet this was initiated by a lawyer who owns some Apple stock who has too much time on his hands. 

 

You know the thing with this "anti-poaching" is that it only meant that one company couldn't cold-call another to try and steal an employee.  It did not mean that employees couldn't apply for jobs (and be accepted) of their own volition.   Many employees switched companies during the years that the anti-poaching agreement was in effect.   So in the end, this is much ado about almost nothing.      

post #32 of 71
Quote:
Originally Posted by 1brayden View Post
 

Wow. This country is heading into the crapper. 

 

In our current me-myself-and-I culture it’s all about getting whatever you can get by any means. This includes corporations, CEOs, shareholders, customers, users, all of us. Don’t forget that lawyers conjure up these scenarios and then advertise for plaintiffs to “come forward.”

 

Bottom line? “Show me the money!”

post #33 of 71
Quote:
Originally Posted by rob53 View Post

The problem is Klein doesn't speak for me and I am an AAPL stockholder, therefore, I take exception to his lawsuit and should organize a countersuit against Klein for thinking he could include all the other stockholders in this lawsuit without their consent.

And when you get the paperwork in the mail, all you do is notify them back that you don't wish to be included in the class.    You don't have to sue anybody.   This is common procedure in all class action lawsuits.

post #34 of 71
Quote:
Originally Posted by zoetmb View Post

And when you get the paperwork in the mail, all you do is notify them back that you don't wish to be included in the class.    You don't have to sue anybody.   This is common procedure in all class action lawsuits.

You don't have to do anything. Mine go straight to the shredder.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #35 of 71

This sounds like something cooked up by the lawyers out of work, because of the drop in legal activity against Samsung.

post #36 of 71
Quote:
Originally Posted by zoetmb View Post
 

And when you get the paperwork in the mail, all you do is notify them back that you don't wish to be included in the class.    You don't have to sue anybody.   This is common procedure in all class action lawsuits.

The problem is, I don't want Apple or any of these companies and people to have to spend anymore money defending themselves against frivolous lawsuits. Therefore, I feel a countersuit against the person and lawyers making this frivolous lawsuit makes more sense than simply choosing not to be involved. 

post #37 of 71
Quote:
Originally Posted by rob53 View Post
 

Wrong, read the complain linked in this article. Apple is a defendant.

 

R. ANDRE KLEIN, on behalf of himself and all other stockholders of APPLE INC., Plaintiff,
vs. 
TIMOTHY D. COOK, WILLIAM V. CAMPBELL, MILLARD (“MICKEY”) DREXLER, ARTHUR D. LEVINSON, ROBERT A. IGER, ANDREA JUNG, FRED D. ANDERSON, ESTATE OF STEVEN P. JOBS, deceased, and DOES 1-30, inclusive, Defendants,
- and – 
APPLE INC., a California corporation,  Nominal Defendant.

 

The problem is Klein doesn't speak for me and I am an AAPL stockholder, therefore, I take exception to his lawsuit and should organize a countersuit against Klein for thinking he could include all the other stockholders in this lawsuit without their consent.

 

As a nominal defendant Apple is not on the hook, as I understand it, however must be named for this to be a valid complaint.  This is about a shareholder saying the board/management didn't act in his best interests.  Seeing as he owns a part of the company, certainly seems right that he is able to take action against the board (who is supposed to represent shareholders) and "his" employees.  Other shareholders may disagree and of course choose not to participate.

post #38 of 71
to be clear, the lawsuit demands damages from the individuals named, not from the corporation. that said, its a pointless waste of time and more money.
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post #39 of 71
Quote:
Originally Posted by rob53 View Post
 

Wrong, read the complain linked in this article. Apple is a defendant.

 

R. ANDRE KLEIN, on behalf of himself and all other stockholders of APPLE INC., Plaintiff,
vs. 
TIMOTHY D. COOK, WILLIAM V. CAMPBELL, MILLARD (“MICKEY”) DREXLER, ARTHUR D. LEVINSON, ROBERT A. IGER, ANDREA JUNG, FRED D. ANDERSON, ESTATE OF STEVEN P. JOBS, deceased, and DOES 1-30, inclusive, Defendants,
- and – 
APPLE INC., a California corporation,  Nominal Defendant.

 

The problem is Klein doesn't speak for me and I am an AAPL stockholder, therefore, I take exception to his lawsuit and should organize a countersuit against Klein for thinking he could include all the other stockholders in this lawsuit without their consent.

Duly chastised; you're right.

 

However, as only a nominal defendant, Apple isn't directly on the line of fire, this is very much targeted at the executives, so the rest of my point stands.  The shareholders aren't suing themselves, they're suing the executives.

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post #40 of 71

This is part of a huge curruption case and unfortunately Steve Jobs and many others was very much at the center of it.

 

http://pando.com/tag/techtopus/

 

http://pando.com/2014/07/07/revealed-court-docs-show-role-of-pixar-and-dreamworks-animation-in-silicon-valley-wage-fixing-cartel/

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