Major tech companies pay out more than US$300m in lawsuit over ‘hiring truce’

25 Apr 20141 Share

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Some of the largest technology companies in the world based in Silicon Valley, California, have paid out US$324m in a lawsuit over an alleged conspiracy to not hire each other’s employees over fears of a ‘salary war’.

Reuters reported that tech workers in Silicon Valley had filed a lawsuit, claiming companies such as Apple, Google, Adobe and Intel had a non-contractual truce that would prevent them from going after each other’s employees over fears the companies would be forced to pay exorbitant wages just to compete and that their secrets would be revealed to some of their biggest rivals.

The tech workers who brought the lawsuit to the California court had initially proposed they be awarded US$3bn in damages that could triple to US$9bn under the US’ anti-trust laws.

The claims first came to light in court from emails between the late CEO of Apple, Steve Jobs, and Google’s former CEO Eric Schmidt, in which Schmidt promised Jobs he would fire a recruiter that had attempted to poach an Apple employee to Google.

Another email appeared to show Schmidt advising discretion to a human resources operator within the company regarding the agreement with other tech companies, saying he would rather not discuss the matter over email “since I don’t want to create a paper trail over which we can be sued later”.

Given this settlement, the companies have acknowledged that there existed certain no-hire agreements but have refused the claims that these agreements were an attempt to keep wages of their employees down.

Colm Gorey is a journalist with Siliconrepublic.com

editorial@siliconrepublic.com