Four major technology companies including Apple, Google, Intel, and Adobe Systems have agreed to a settle a class action lawsuit alleging they conspired to hold down salaries in Silicon Valley, according to WashingtonPost. As per the settlement, disclosed in a court filing Thursday, the companies will pay a total of $324 million. The break up of the amount wasn't revealed.
Filed in 2011, the case alleged that the companies agreed not to poach staff from each other, preventing workers from getting better job offers. Although the lawsuit claimed $3 billion in damages on behalf of more than 64,000 workers at the four companies, under antitrust law, that could have then been tripled to $9 billion. A trial was scheduled to begin later next month.
While high damages award was one reason, the case was also being closely watched because of the disclosure of emails in which the late Steve Jobs, Google's Eric Schmidt, and other tech leaders hatched plans to avoid poaching each other’s engineers.
According to court documents, in one email exchange Eric Schmidt tells Steve Jobs that the recruiter who solicited an Apple employee would be fired. Jobs then forwarded the email to one of the Apple's top human resources executives with a smiley face.
Another email exchange shows Google’s human resources director asking Schmidt about sharing its no-cold-call agreements with competitors. But Schmidt preferred it be shared verbally. "I don't want to create a paper trail over which we can be sued later", he said. Obviously, the HR director agreed.
Although the companies acknowledged entering into some no-hire agreements, they rejected the allegation that they conspired to hold down salaries. They also argued that employees should not be allowed to sue as a group.
While spokespersons for Apple, Google, and Intel declined to comment, an Adobe representative said the company denies engaging in any wrongdoing but settled “in order to avoid the uncertainties, cost and distraction of litigation”. On the other hand, an attorney for the plaintiffs called the deal “an excellent resolution”.