With Billions in Potential Damages Looming, Apple and Google Settle Tech-Worker Antitrust Suit

Your News Companion by Ben Mathis-Lilley
April 24 2014 9:27 PM

With Billions in Potential Damages Looming, Apple and Google Settle Tech-Worker Antitrust Suit

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Apple and Google settle a class action suit alleging collusion to keep tech workers' salaries down.

Photo by Justin Sullivan/Getty Images

Four of the tech world’s biggest companies—Apple, Google, Adobe, and Intel—agreed to a settlement in a lawsuit filed by tech workers accusing the companies of colluding to keep salaries in check. The settlement, released in a court filing on Thursday, agreed to pay out $324 million, according to Bloomberg. The employees of the companies in the suit allege that the tech giants negotiated a “no poaching” agreement designed to keep them from hiring away each other’s employees and escalating salaries. The trial was set to start in May on behalf of 64,000 employees.

The case attracted attention because of the potential for significant damages to be awarded, if the employees could prove their case. Even before the trial was to begin, the companies conceded “entering into some no-hire agreements but disputed the allegation that they had conspired to drive down wages,” Reuters reports. “If the Silicon Valley-based technology firms hadn’t settled, they would have faced a trial in federal court in San Jose, California, with a demand for as much as $3 billion in damages,” according to Bloomberg. “Under federal antitrust law, damages won at trial could be tripled.”

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The potential for billions makes the settlement for a fraction of that seem paltry by comparison. Or, as the New York Times describes it, “the workers of Silicon Valley have won an important victory over their bosses. What they did not win is a lot of money.” At the heart of the tech workers case, Reuters reports, was “a steady disclosure of emails in which Apple's late co-founder Steve Jobs, former Google CEO Eric Schmidt and some of their Silicon Valley rivals hatched plans to avoid poaching each other's prized engineers.”

Here’s more on the email trail from Reuters:

In one email exchange after a Google recruiter solicited an Apple employee, Schmidt told Jobs that the recruiter would be fired, court documents show. Jobs then forwarded Schmidt's note to a top Apple human resources executive with a smiley face. Another exchange shows Google's human resources director asking Schmidt about sharing its no-cold call agreements with competitors. Schmidt, now the company's executive chairman, advised discretion. "Schmidt responded that he preferred it be shared 'verbally, since I don't want to create a paper trail over which we can be sued later?'" he said, according to a court filing. The HR director agreed.

“We think it’s an excellent result and we look forward to presenting it,” Kelly Dermody, a lawyer for the plaintiffs, said in an e-mail to Bloomberg. 

Elliot Hannon is a writer in Washington, D.C. Follow him on Twitter.

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