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Google, Apple, Intel, Adobe offer to settle no-poach suit

Google, Apple, Intel, Adobe offer to settle no-poach suit

Adobe, Apple, Google and Intel have jointly offered to settle a $3 billion lawsuit which accused them of driving wages down by enforcing anti-poaching agreements.

Adobe, Apple, Google and Intel have jointly agreed to settle a lawsuit which alleged that the companies had colluded to drive salaries down by enforcing a no-poaching agreement that prevented staff from easily moving between the firms.

A class action suit against the companies brought the alleged malpractice to light in 2011, claiming that the companies had agreements which would prevent jobs been offered to each others' staff. This no-poaching agreement, the affected workers claim, prevented a fair and competitive employment environment, and meant that the companies no longer had to keep salaries high to prevent their staff being poached. The suit asked for an impressive $3 billion in damages related to depressed wages, which could potentially have been tripled to $9 billion if the activity was found by the court to breach antitrust laws.

A court will not be given a chance to rule on that matter, however, with the companies agreeing a payout ahead of the hearing at the end of May. Instead of a public court hearing, Reuters reports that all four companies have agreed to settle for a combined total of $324 million - a fraction of the amount sought by the suit - for the case's 64,000 workers.

Evidence which could have proved the case included emails between the companies which saw a Google recruiter sacked after poaching an employee from Apple - news which Apple co-founder Steve Jobs greeted with a smiley face emoticon, the court documents show. Another email from Google's Eric Schmidt warned the company's human resources director that details of the no-poaching agreement should be shared verbally rather than via email, 'since I don't want to create a paper trail over which we can be sued later.'

While the companies have admitted that there were selected no-hire agreements in place, they have denied that they existed to drive down wages. By settling, the companies do not have to admit to any wrongdoing; fellow defendants Disney and Intuit had already settled the same case for $9 million and $11 million respectively.

The case will not be closed until the court rules to accept the settlement offer.

13 Comments

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Corky42 25th April 2014, 11:42 Quote
Who does the $324 million go to ?
Gareth Halfacree 25th April 2014, 13:53 Quote
Quote:
Originally Posted by Corky42
Who does the $324 million go to ?
The majority will go to the lawyers, as always; whatever's left when they've had their pound of flesh will be doled out to the class, i.e. the 64,000 workers affected by the suit.
Corky42 25th April 2014, 14:47 Quote
Yea i thought it was going to be a case of paying the lawyers, so i guess the workers will get around a $1 each :D
Shame they cant appeal or something and force it to go to court.
Thawn 25th April 2014, 18:28 Quote
How do they decide whether to accept the settlement? Do the class have to vote on it, or do the lawyers decide?
fodder 25th April 2014, 21:46 Quote
If it's anything like the Equitable Life saga, the lawyers will send letters to all their clients asking (and advising) for agreement on the settlement. All chargable, probably at the going rate for a letter to each one. IE roughly £12 per letter X 64,000 - not a bad return for a few stamps. Then there's the charge for opening and collating all the returns.....
Cthippo 25th April 2014, 22:09 Quote
Quoting from the judge's order denying defendent's motion to summarily dismiss...
Quote:
“Defendants have conceded that there were a series of six-bilateral agreements,” the judge noted, by which Silicon Valley employers sought to hold down their payrolls by not recruiting rivals’ employees. “All six of these agreements contained nearly identical terms, precluding each pair from affirmatively soliciting any of each other’s employees,” she added (italics hers). Then the capper: “Defendants’ experts concede that they are unaware of these types of long-term, all-employee agreements ever occurring between other firms.”

Basically the judge told the companies "you'd better settle because you're probably going to lose big if you go to trial."

Source
Corky42 26th April 2014, 07:30 Quote
Quote:
Originally Posted by Cthippo
Basically the judge told the companies "you'd better settle because you're probably going to lose big if you go to trial."

That would really stick in my throat if i was one of those workers, not only are they probably going to end up with peanuts, but the companies involved get away without having to admit wrong doings and there is no saying its not going to carry on happening >:(
rainbowbridge 27th April 2014, 12:52 Quote
wow this is a pretty amazing news story, surprising they did this.
Thawn 27th April 2014, 17:05 Quote
> That would really stick in my throat if i was one of those workers.

Indeed. If this settlement gets accepted I can't really see how it is going to dissuade companies from this type of behaviour at all.
megamale 27th April 2014, 18:04 Quote
Funny this,

I work as a consultant specializing in implementing a particular piece of software in Banks. The software maker has in its contract a clause forbidding the clients from hiring their staff. Of course this is to protect their own overpriced consulting service.

I wonder if this is legal in UK.
rollo 27th April 2014, 20:04 Quote
Does not really have to be legal, 4 of the biggest companies in the world just paid it off for pocket change.
Cthippo 27th April 2014, 20:16 Quote
I'm pretty sure that while they aren't admitting fault, they did get caught at it and the consequences of getting caught at it again would be significantly greater. The plaintiffs in the case achieved their goal of bringing this practice to light and at least making it more difficult for the companies to do it again, thereby increasing the plaintiff's job prospects and earning potential.

The monetary value of the settlement is fairly low, probably just enough to cover attorney fees, but this case was more about behavior than damages.

According to the article I posted above, there was also a concern amongst the plaintiffs that had they gone to trial their employee records would have been publicly released during discovery, which would have probably adversely impacted their future job prospects.

tl:dr, this was a win for the plaintiffs, even though it might not seem big
SirFur 28th April 2014, 10:48 Quote
Quote:
Originally Posted by Cthippo


tl:dr, this was a win for the plaintiffs, even though it might not seem big

Agreed. Well put above. Simply a behaviour change has been called for and hopefully this will help. Ripples of this will be felt lower down the chain I am sure, simply as a result of this being 'a very bad thing' to get caught in the act of doing.
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