Silicon Valley anti-poaching suit to proceed as judge denies requests from Apple, others
A federal judge on Friday issued an order denying requests from Apple, Google, Intel and Adobe to escape going to trial over claims that the four tech heavyweights artificially suppressed employee wages through anti-poaching agreements.
Steve Jobs and Eric Schmidt during the iPhone's introduction at MacWorld in 2007.
U.S. District Court Judge Lucy Koh handed down her ruling denying individual motions from each of the four tech companies seeking summary judgment, which would have stopped the case from going to trial.
Apple and the three other tech giants are facing a class action lawsuit over alleged wage suppression as a result of anti-solicitation agreements formed by top-level executives. Judge Koh granted class status in October after initially denying the request six months earlier.
As noted by in-court reports from The Wall Street Journal, both plaintiffs and defendants claimed during a hearing on Thursday that progress was being made toward a potential settlement, but an actual deal was not yet in the offing.
From Judge Koh's ruling:
In 2005, Google was looking to hire away members from Apple's Safari team, a move that "agitated" Jobs. He reportedly spoke to Brin, vowing to start a war if Google ended up hiring any of the candidates. Less than one month later, a supposed anti-poaching agreement was in place.
Jobs also made similar asks of other top company execs like Edward Colligan, former CEO of erstwhile handset maker Palm. Colligan refused to enter any such agreement, however, saying that it was "likely illegal."
Plaintiffs in the current class action suit -- some 64,000 past and present employees -- argue that these anti-solicitation methods held down wages. Further, Judge Koh notes in the ruling that there may be evidence that certain companies shared wage information despite being direct competitors for talent.
The U.S. Department of Justice leveled its own lawsuit regarding the matter after investigating Apple, Adobe, Google, Intel, Intuit, and Pixar for the same anti-poaching measures. The defendants ultimately settled with the DOJ in 2010.
Trial proceedings for the case High-Tech Employee Antitrust Litigation are scheduled to commence on May 27.
Steve Jobs and Eric Schmidt during the iPhone's introduction at MacWorld in 2007.
U.S. District Court Judge Lucy Koh handed down her ruling denying individual motions from each of the four tech companies seeking summary judgment, which would have stopped the case from going to trial.
Apple and the three other tech giants are facing a class action lawsuit over alleged wage suppression as a result of anti-solicitation agreements formed by top-level executives. Judge Koh granted class status in October after initially denying the request six months earlier.
As noted by in-court reports from The Wall Street Journal, both plaintiffs and defendants claimed during a hearing on Thursday that progress was being made toward a potential settlement, but an actual deal was not yet in the offing.
From Judge Koh's ruling:
In the order, Judge Koh cites anti-solicitation discussions between high-ranking executives, including late Apple cofounder Steve Jobs, carried out through email and other correspondence. One such email exchange between Jobs and Google cofounder Sergey Brin was highlighted earlier in March after being submitted as evidence.The similarities in the various agreements, the small number of intertwining high-level executives who entered into and enforced the agreements, Defendants' knowledge about the other agreements, the sharing and benchmarking of confidential compensation information among Defendants and even between firms that did not have bilateral anti-solicitation agreements, along with Defendants' expansion and attempted expansion of the anti-solicitation agreements constitutes evidence, viewed in the light most favorable to Plaintiffs, that tends to exclude the possibility that defendants acted independently, such that the question of whether there was an overarching conspiracy must be resolved by a jury.
In 2005, Google was looking to hire away members from Apple's Safari team, a move that "agitated" Jobs. He reportedly spoke to Brin, vowing to start a war if Google ended up hiring any of the candidates. Less than one month later, a supposed anti-poaching agreement was in place.
Jobs also made similar asks of other top company execs like Edward Colligan, former CEO of erstwhile handset maker Palm. Colligan refused to enter any such agreement, however, saying that it was "likely illegal."
Plaintiffs in the current class action suit -- some 64,000 past and present employees -- argue that these anti-solicitation methods held down wages. Further, Judge Koh notes in the ruling that there may be evidence that certain companies shared wage information despite being direct competitors for talent.
The U.S. Department of Justice leveled its own lawsuit regarding the matter after investigating Apple, Adobe, Google, Intel, Intuit, and Pixar for the same anti-poaching measures. The defendants ultimately settled with the DOJ in 2010.
Trial proceedings for the case High-Tech Employee Antitrust Litigation are scheduled to commence on May 27.
Comments
Apple is dead guilty of this, as are many others.
This wouldn't have happened if Tim Cook were in charge (at the time).
Circle this date. GTR and I agree.
Kidding aside tho Apple, Google, Adobe and the other conspirators should absolutely be found guilty and hit with serious penalties.
The problem is that your competitors will poach your employees if there is not an agreement. There is nothing stopping a poached employee from disclosing secrets and IP even if they sign a non-disclosure agreement as long the implementation/code of the IP is disguised well.
We all have seen the lengths that some of these companies will go to to try and compete with Apple. This is a tough situation to deal with from a R&D point of view.
Without some kind of agreement an employer probably would be forced to pay unreasonable compensation for some of the workers to keep them employed.
GET A NEW JUDGE.
The government demands their pound of flesh.
Yeah, if all these employees didn't like the anti-poaching agreements of their competing employers, all they had to do was go work for a competing employer, let the free market sort itself out and keep regulators out of their business. Oh wait.
Well, let's hope that the government doesn't keep any pound of flesh for itself but instead rules that payments have to be sent to the people involved in the class action lawsuit as has been the case in other class action lawsuits.
It's a shame that it's poor workers that are the victims here and not a multi-billion dollar corporation because if it was a corporation, it would be fine for them to ask the government for all the flesh they wanted:
http://forums.appleinsider.com/t/162678/apple-denied-renewed-motion-for-permanent-injunction-against-samsung#post_2482458
Government involvement is fine as long as it promotes blocking competition in salaries and products because that's how the free market thrives.
and what defines a member of this class?
"i'm so great and talented but google never came to poach me with millions of dollar therefore I'm a victim."???
either the class is defined by precise documentation or everybody is in the class...
"i'm so great and talented but google never came to poach me with millions of dollar therefore I'm a victim."???
Maybe. By making competitors agree not to poach, each company could keep wages lower. If there was a competitor at the door offering alternative jobs, it could start a bidding war for employees.
So, even someone who was not directly courted or ever would have been may have been paid less because the market conditions affecting salaries were artificially and illegally manipulated by the employers. They could therefore be described as a "victim."
Yeah, if all these employees didn't like the anti-poaching agreements of their competing employers, all they had to do was go work for a competing employer, let the free market sort itself out and keep regulators out of their business. Oh wait.
Well, let's hope that the government doesn't keep any pound of flesh for itself but instead rules that payments have to be sent to the people involved in the class action lawsuit as has been the case in other class action lawsuits.
It's a shame that it's poor workers that are the victims here and not a multi-billion dollar corporation because if it was a corporation, it would be fine for them to ask the government for all the flesh they wanted:
http://forums.appleinsider.com/t/162678/apple-denied-renewed-motion-for-permanent-injunction-against-samsung#post_2482458
Government involvement is fine as long as it promotes blocking competition in salaries and products because that's how the free market thrives.
Oh, Marvin. You are so funny. Of course these lawsuits are for the benefit of the government. People are self-interested and government is made of people.
Short of a total economic collapse, there are few things that will quell the growth and intrusiveness of this massive entity. At least in a free market there are competitive forces that restrain growth and keep companies responsive to the purchasing public...otherwise they go out of business.
What forces keep government honest? Voters? Nope, special interests fund and feed every powerful appointee of every political persuasion in Washington.
The press? Nope, they are ofttimes mouthpieces for government-fed propaganda.
The Constitution? Nope, as we've seen countless times (even in the last several years) lawmakers regularly violate the very laws designed to restrain them.
The intrusion into this "anti-poaching" matter will result in massive penalties that will go right into the massive black hole that is Washington.
Maybe. By making competitors agree not to poach, each company could keep wages lower. If there was a competitor at the door offering alternative jobs, it could start a bidding war for employees.
So, even someone who was not directly courted or ever would have been may have been paid less because the market conditions affecting salaries were artificially and illegally manipulated by the employers. They could therefore be described as a "victim."
Good luck producing evidence that proves individual harm. Employees and former employees will receive a $5 Starbucks coupon, while the government absorbs the extortion money.
Are you suggesting that when people act in a self-interested way, the outcome is bad and such behaviour should be condemned?
The government is trying to promote competition here as they did before:
http://appleinsider.com/articles/10/09/24/us_department_of_justice_orders_apple_to_end_anticompetitive_deals.html
"The DOJ argued that the "no poaching" agreements resulted in collusion, which depressed wages. The often informal agreements "eliminated a significant form of competition to attract highly skilled employees.""
They are acting to promote competition where the corporations are stifling competition by controlling the supply of jobs. You seem to be on the side of stifling competition while defending competitive forces in a free market.
If a corporation monopolises the supply of a limited resource (such as the supply of work) to create an anti-competitive situation, how would the situation resolve itself?
It depends on how you interpret what's written - it was written by self-interested people remember and people in government no less, writing their own rules; they even had to add some of the more important parts later on. It starts:
"We the People of the United States, in Order to form a more perfect Union, establish Justice, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity"
Corporations have been taking away the freedom of employees to improve their welfare for the benefit of their children (posterity), thereby violating the constitution and the government is upholding it.
You could also interpret it in the way that government is trying to take away the freedom of the employers to improve the success of their company and welfare.
The outcome people prefer and consider to be correct depends on the vantage point but you can also consider the extremes of each scenario:
- if employers were able to stifle all hiring possibilities by locking employees into roles that prevented their career progression, that would be better for the portion of ~10m employers in the US who secured the best talent first
- if no employer was able to stifle hiring possibilities, all employees would be free to work and compete at the best companies for the best pay, that would be better for the ~110m employees in the US and the portion of employers who didn't get the best talent first
It's clear the latter is beneficial to more people without immediate impact to the employers and employers gain from this too as they are able to offer competitive salaries for the best talent.
It must really irk you that this anti-poaching agreement was struck between companies all famously run by Obama-supporting Democrats. The situation is sopping with irony.
That's the real travesty.
Those lawyers will get upwards of 40% of the total take when its all said and done, leaving little for the people most affected.
Class-action lawsuits have always been a scam.
The same companies are tax avoiders too. It is irksome; if they are going to support a particular set of politics then they should do it through their actions.
What would be good to know is which direction the poaching was going. It sounded like employees were going to Google - probably for the lobster lunches and bouncy balls. It looks like some went to Intuit:
http://www.computerworld.com/s/article/9247308/_No_poaching_case_versus_Google_Apple_others_can_go_to_trial
"In another case, Bill Campbell, chairman of Intuit's board of directors, emailed Brin, stating, "Steve Jobs called me again and is pissed that we are still recruiting his browser guy," according to Friday's ruling."
Some people seem to have liked working at Apple:
http://bgr.com/2014/02/11/what-its-like-to-work-at-apple/
"On the outside looking in, Apple seems like a terrific place to work — and for many employees it certainly is. We have spoken with a number of former and current Apple employees over the years who fondly recall their time with the Cupertino, California-based technology giant."
others not so much:
https://medium.com/apple-daily/f5f8c807d868
I could imagine the work at Apple being harder than at other companies but it will depend on how high up your are or what job role you have.
The above link says:
"There's also evidence that the defendants shared confidential compensation information despite considering each other competitors for talent, Judge Koh wrote.
And evidence indicates there may have been other agreements between companies that are not defendants in the case, Koh said. For example, Jobs called Edward Colligan, former CEO at Palm, to ask him to be part of an anti-solicitation agreement and threatened patent litigation against Palm if it refused, the ruling says.
Some 64,000 technology workers could be affected by the suit, which was first filed in 2011 by five software engineers.
A case management hearing was held Thursday in San Jose, where attorneys for both sides said progress was being made toward a possible settlement."
If there are 64,000 workers affected and salaries were held down by $10,000 each for 5 years, that would come to $3.2b. Split between all those big companies, that's not very much.