Apple, Google settle Silicon Valley poaching lawsuit for US$415m

16 Jan 2015

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Four of Silicon Valley’s largest tech firms have agreed to pay US$415m to a number of former employees who, in an antitrust class action lawsuit, claimed the companies restricted them from changing jobs.

As we reported on Wednesday, an almost four-year legal battle drew to a close after plaintiffs agreed to settle with Intel, Google, Apple and Adobe Systems. The plaintiffs had accused the four firms of conspiring to stop their movement as employees between companies in the tech sector so as to not obtain each other’s internal operations and, as a result, keeping a lid on salaries.

Despite the companies agreeing to a settlement of US$324.5m to end the dispute last year, US District Judge Lucy Koh rejected this offer as being too low. Now Reuters has revealed the final figure to be US$415m.

The original case from 2011 arose after it was revealed Apple’s late co-founder and former chief executive Steve Jobs and Google’s former CEO Eric Schmidt had exchanged emails discussing the agreement not to hire one another’s staff, which goes against employment law. About a dozen firms allegedly struck a deal in 2009 to not pursue employees who were at ‘manager level or above’, even if they were approached by the candidates themselves.

This wage-fixing cartel is said to have affected around 1m employees. According to the lawsuit, more that 60,000 engineers had their wages suppressed.

Last October, new lawsuits were filed against Microsoft and Oracle relating to the alleged no-poach deal between companies.

However, Oracle contacted Siliconrepublic.com with the following statement: “This lawsuit is beyond preposterous and we will move to have it promptly dismissed. Oracle was deliberately excluded from all prior litigation filed in this matter because all the parties investigating the issue concluded there was absolutely no evidence that Oracle was involved.”

Law image via Shutterstock

Dean is a freelance journalist and editor covering media.

editorial@siliconrepublic.com