High-tech giants settle suit alleging ‘no poaching’ pact hurt workers’ wages
SAN FRANCISCO – Google, Apple, Intel and Adobe Systems have settled a class-action lawsuit alleging they conspired to prevent their engineers and other highly sought technology workers from getting better job offers from one another.
The agreement announced Thursday averts a Silicon Valley trial that threatened to expose the tactics deployed by billionaire executives such as late Apple Inc. CEO Steve Jobs and former Google Inc. CEO Eric Schmidt to corral less affluent employees working on a variety of products and online services. Had they lost, the companies also faced the prospect of paying as much as $9 billion.
The trial had been scheduled to begin May 27 in San Jose, Calif.
Terms of the settlement aren’t being revealed yet. Those details will be provided in documents that will be filed in court by May 27, according to Kelly Dermody, an attorney representing the workers who contended they were cheated out of bigger paychecks.
“This is an excellent resolution,” Dermody said in a prepared statement.
The suit, which grew out of an earlier Justice Department investigation, was seeking $3 billion in damages on behalf of 64,600 workers employed at some point from 2005 through 2009. Had damages been awarded in trial, they could have been tripled under antitrust laws forbidding U.S. companies from engaging in behavior that suppresses a free market.
A $9 billion award would have translated into an average of nearly $140,000 per worker. Programmers, software developers and computer scientists make an average of $80,000 to $110,000 annually, depending on their specific duties, according to the latest wage data from the U.S. Department of Labor.
Some of the aggrieved employees in the class-action lawsuit worked at software maker Intuit Inc., and two filmmakers now owned by Walt Disney Co., Pixar Animation and Lucasfilm. Intuit, Pixar and Lucasfilm had previously negotiated a $20 million settlement of the claims against them. That settlement still needs court approval.
The 3-year-old case revolves around a “gentlemen’s agreement” that the companies forged to retain employees. Internal emails excavated during the pretrial proceedings showed Google, Apple and other major technology employers agreed not to recruit each other’s workers to help protect their own interests.
The companies maintained that the “no-poaching” cartel wasn’t illegal because they still could hire employees from their partners in the arrangement, as long as the workers initiated the inquiries about vacant positions.
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