Four major tech companies were accused of agreeing not to poach each other's employees in order to drive down wages
Four major technology companies settled a lawsuit that alleged they conspired to keep salaries low in Silicon Valley only weeks before the high-profile trial date, Reuters reports.
About 60,000 tech employees filed a class action lawsuit against Apple, Google, Intel and Adobe in 2011 accusing those companies of agreeing not to hire one another’s employees in order to drive down salaries. The plaintiffs cited emails from top executives like the late Apple CEO Steve Jobs and former Google CEO Eric Schmidt in which they discussed an agreement not to poach each others’ workers and thus enter a salary war.
In one particularly damning email, Schmidt tells Jobs that an employee recruited from Apple to Google will be fired per their agreement—an email that Jobs forwarded to an Apple human resources executive with the comment: “:)”
The companies admitted to having a no-hire agreement but denied that they did so to lower wages. Other companies refused to participate in such agreements: Facebook’s COO Sharyl Sandberg refused to agree to such terms with Google in 2008, according to documents. Heading into trial, the employees were seeking $3 billion in damages.
Apple, Google, Intel and Adobe settled a civil suit in 2010 facing the same charges they did in the class-action lawsuit. At the time, the U.S. Justice Department noted that “cold calling” or companies recruiting from competitors’ ranks was best for the worker: “This form of competition, when unrestrained, results in better career opportunities.”
The trial for the class-action was scheduled for the end of May. The plaintiffs and the companies will disclose the principal terms of the settlement on May 27.