64,613 Software Engineers Join Class Action Hiring Conspiracy Lawsuit against Apple, Google, Intel and Adobe

Tuesday, April 22, 2014
(graphic: Steve Straehley, AllGov)

The biggest legal story out of Silicon Valley these days involves more than 64,000 software engineers collectively suing several high-tech giants over their collusion to keep workers’ salaries down.

 

The class-action lawsuit, with 64,613 plaintiffs, targets Google, Apple, Intel and Adobe for secretly agreeing not to poach each other’s engineers and to share salary information in an effort to control salaries.

 

The collusion reportedly began in 2005, when Apple’s Steve Jobs approached Google’s top executive, Eric Schmidt, about working together to hold down salaries.

 

After getting Google on board, Jobs “strong-armed” Adobe into joining the secret pact, according to court documents. The documents show that Adobe CEO Bruce Chizen was reluctant to go along until Jobs threatened to poach Adobe engineers.

 

Chizen: “I thought we agreed not to recruit any senior level employees…. I would propose we keep it that way. Open to discuss. It would be good to agree.”

Jobs: “OK, I’ll tell our recruiters they are free to approach any Adobe employee who is not a Sr. Director or VP. Am I understanding your position correctly?”

Chizen: “I’d rather agree NOT to actively solicit any employee from either company…..If you are in agreement, I will let my folks know.”

 

The case is scheduled to go to trial next month. However, The New York Times reported that a settlement is likely to be reached as the defendants would probably prefer to avoid a jury trial in which incriminating emails and other evidence could become public.

The plaintiffs are seeking $3 billion to cover wages lost as a result of the collusion. If the companies go to court, they run the risk of losing and being forced to pay triple that amount under federal antitrust laws.

 

A similar case involves eBay and Intuit, which are being sued by the federal government and the state of California for secretly trying to control wages. Google might get pulled into this litigation as well.

-Noel Brinkerhoff

 

To Learn More:

In Silicon Valley Thriller, a Settlement May Preclude the Finale (by David Streitfeld, New York Times)

Silicon Valley Conspiracy to Suppress Wages Goes from DOJ to Class-Action (by Ken Broder, AllGov California)

High-tech Employee Antitrust Litigation (U.S. District Court, Northern California, San Jose)

The Techtopus: How Silicon Valley’s Most Celebrated CEOs Conspired to Drive down 100,000 Tech Engineers’ Wages (by Mark Ames, Pando Daily)

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