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

Top three mobile application threats

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. ®

3 Big data security analytics techniques

More from The Register

next story
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
Sorry London, Europe's top tech city is Munich
New 'Atlas of ICT Activity' finds innovation isn't happening at Silicon Roundabout
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
It may be ILLEGAL to run Heartbleed health checks – IT lawyer
Do the right thing, earn up to 10 years in clink
prev story

Whitepapers

Designing a defence for mobile apps
In this whitepaper learn the various considerations for defending mobile applications; from the mobile application architecture itself to the myriad testing technologies needed to properly assess mobile applications risk.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.