Feeds

Techies CAN sue Google, Apple, Intel et al accused of wage-strangling pact

Dead Apple tyrant Steve Jobs named as prime mover in shafting his workers

Next gen security for virtualised datacentres

Employees at top Silicon Valley companies can sue bosses accused of entering a secret pact that kept salaries down, a judge in California has ruled.

The lawsuit claims that between 2005 and 2007 Apple, Google, Intel, Adobe, Intuit, Pixar and Lucasfilm entered into non-compete agreements to end the practice of poaching of staff with promises of fatter paychecks and other benefits. Five software engineers sued after a Department of Justice investigation unearthed evidence of recruitment shenanigans. The accused firms sought to have the case dismissed – a request denied on Wednesday by Judge Lucy Koh.

"The fact that all six identical bilateral agreements were reached in secrecy among seven Defendants in a span of two years suggests that these agreements resulted from collusion, and not from coincidence," she wrote in her judgment.

"For example, it strains credulity that Apple and Adobe reached an agreement in May 2005 that was identical to the 'Do Not Cold Call' agreement Pixar entered into with Lucasfilm in January 2005."

The late Steve Jobs was a key mover in the underhand pacts, it is claimed. Apple had agreements with Pixar, Google, and Adobe that senior staff would be placed on a recruitment blacklist and not approached for better-paying jobs, it was alleged. An email from Jobs indicated he tried to broker similar deals with other employers, the court heard.

"We must do whatever we can to stop cold calling each other's employees and other competitive recruiting efforts between the companies," Jobs wrote in an email to the then CEO of Palm Ed Colligan, and Jobs threatened to tie the firm up with litigation if Palm didn't agree.

Colligan held firm however, and turned Jobs down flat. "Your proposal that we agree that neither company will hire the other's employees, regardless of the individual's desires, is not only wrong, it is likely illegal," he replied.

Google's Eric Schmidt is also named as a key mover by the plaintiffs. They claim the executive chairman negotiated non-compete deals with Intel and Intuit to block staff from being offered better deals to change employers.

The DOJ concluded in 2010 that such deals had been going on and banned the practice in a settlement with the companies – but the firms involved admitted no guilt. Now employees have the go-ahead for a class-action suit against their employers and, based on the number of staff potentially involved, the bill for the firms could be very high indeed.

Rumors of managers trimming costs by colluding to keep wages down have long been rife in Silicon Valley, but it wasn't until the DOJ stepped in that evidence came to light. The authorities are now investigating which other companies may have had similar deals and the possibility of further action seems likely.

Judge Koh said that the plaintiffs were now free to sue the firms under the antitrust Sherman Act and California’s Cartwright Act. The case is expected to begin in June. ®

Secure remote control for conventional and virtual desktops

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Kaspersky backpedals on 'done nothing wrong, nothing to fear' blather
Founder (and internet passport fan) now says privacy is precious
TROLL SLAYER Google grabs $1.3 MEEELLION in patent counter-suit
Chocolate Factory hits back at firm for suing customers
Mozilla's 'Tiles' ads debut in new Firefox nightlies
You can try turning them off and on again
Sit tight, fanbois. Apple's '$400' wearable release slips into early 2015
Sources: time to put in plenty of clock-watching for' iWatch
Ex-IBM CEO John Akers dies at 79
An era disrupted by the advent of the PC
prev story

Whitepapers

5 things you didn’t know about cloud backup
IT departments are embracing cloud backup, but there’s a lot you need to know before choosing a service provider. Learn all the critical things you need to know.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Backing up Big Data
Solving backup challenges and “protect everything from everywhere,” as we move into the era of big data management and the adoption of BYOD.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?