Apple, Google, Intel and five other companies were ordered by a judge to appear in court and face an antitrust lawsuit which claimed that all the companies involved conspired to not poach the others’ employees. After an attempt was made by the companies to dismiss the claims, US District Judge Lucy Koh in San Jose, California rejected their collective bid and insists that they are to face the lawsuit brought under the federal Sherman anti-trust law and California’s own anti-trust law, the Cartwright Act.
On Wednesday night, Judge Koh said that the fact the “do not cold call” agreements among the 8 companies existed supports the possibility that agreements were “negotiated, reached and policed at the highest levels” of the companies involved. In addition to that, all six agreements were not only identical but also reached under a shroud of secrecy between the seven companies through a span of 2 years and these points more toward collusion rather than coincidence. The other defendants also based in California include Adobe Systems, Intuit, Walt Disney, Pixar and Lucasfilm.
After the dismissal claims were rejected by Judge Koh, the defendant’s lawyers were unreachable immediately for comment. The proposed class-action lawsuit was highlighted and brought forward by five software engineers who claim that the companies conspiring to not allow employee poaching among themselves is allowing them to further implement limited pay and job mobility by eliminating competition for labor and consequentially costing all the employees involved hundreds of millions of dollars.
In a similar case to this in 2010, the Department of Justice also raised the issue of the same companies implementing a plan amongst each other to not poach the others’ employees but without admitting wrongdoing, all eight firms involved agreed not to take steps to restrict competition for workers, including setting limits on cold-calling and recruiting. One particularly interesting revelation from the case was a 2007 email trail which involved both the CEOs of Apple and Google at the time, the late Steve Jobs and Eric Schmidt.
It started when Google were apparently putting in some effort to recruit an Apple engineer and Jobs wrote, “I would be very pleased if your recruiting department would stop doing this.” Schmidt then apparently forwarded the email to various people, asking if they could “get this stopped.” This resulted in an email from Google’s staffing director which said that the employee who had recruited the engineer had been fired and as a footnote it said, “Please extend my apologies as appropriate to Steve Jobs.”
The lawyer for the five plaintiff engineers, Joseph Saveri said that their case remains on track for a June 2013 trial and that this (the dismissing of the collective’s attempt to dismiss the claims) is a significant step forward.
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