Tech Giants Settled Antitrust Lawsuit over Hiring Practices

A number of tech giants (the list includes Apple and Google) have recently agreed to settle an antitrust lawsuit which was regarded by many as exposing the dark side of Silicon Valley’s hiring practices. It was alleged that some of the industry’s biggest names colluded to avoid poaching each other’s talent.

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Several companies, including Apple, Adobe, Google and Intel, were supposed to go to trial at the end of May, while lawyers for around 64,000 employees alleged that CEOs including Google’s Sergey Brin and Eric Schmidt and Apple’s Steve Jobs had been involved in an elaborate scheme in order to prevent poaching and drive down wages.

The tech giants confessed that they agreed not to hire each other’s employees in certain cases. However, they refused to admit that they conspired to drive down wages. Four years ago, a Justice Department investigation found out that some companies shared confidential salary data in order to prevent bidding wars. They also promised not to call each other’s employees. So, after the corporations settled the federal antitrust complaint, they became the target of a civil lawsuit.

The lawyers had been seeking $3 billion in damages, and the experts point out that under antitrust rules, that amount could have been tripled to $9 billion had the companies lost. The terms of the settlement are expected to be presented in the end of May to US District Judge. The attorneys claimed that it was an excellent resolution of the case that would benefit class members.

Letters from Steve Jobs and Eric Schmidt emerged in pre-trial hearings – there Schmidt told Jobs that a Google recruiter would be fired after approaching an Apple employee. In response, Steve Jobs forwarded Schmidt’s note to a top Apple HR executive, with a smiley face. Another email exchange saw Jobs telling Sergey Brin that if Google hires a “single one of those people”, that means war.

In response, attorneys of the tech giants claimed that the plaintiffs were into “free-floating character assassination” and asked that the emails be barred from entry at the trial. In the meantime, it is known that Walt Disney’s Lucasfilm and Pixar (previously headed by Jobs), along with the software company Intuit, all agreed to a settlement over similar hiring practice allegations a year ago: in result, Disney paid around $9 million and Intuit $11 million.
 
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