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

Security for virtualized 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. ®

Security and trust: The backbone of doing business over the internet

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Sony says year's losses will be FOUR TIMES DEEPER than thought
Losses of more than $2 BILLION loom over troubled Japanese corp
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Why Oracle CEO Larry Ellison had to go ... Except he hasn't
Silicon Valley's veteran seadog in piratical Putin impression
Big Content Australia just blew a big hole in its credibility
AHEDA's research on average content prices did not expose methodology, so appears less than rigourous
Bono: Apple will sort out monetising music where the labels failed
Remastered so hard it would be difficult or impossible to master it again
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
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?
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.