10 Facts Revealed in the Silicon Valley Antitrust Hiring Lawsuit

 
 
By Don Reisinger  |  Posted 2014-04-25 Email Print this article Print
 
 
 
 
 
 
 
 

Some of the most prominent technology companies in the world, including Apple and Google, have settled a lawsuit brought against them over claims that they worked together to stop competing over prospective employees in order to keep wages down. According to Reuters, the companies, which included Adobe and Intel as well, paid $324 million to settle the class-action lawsuit brought against them. A total of 64,000 workers were included in the lawsuit. A court date was set for May, and it appears likely that the companies viewed it a potential public relations nightmare if they allowed the case to go any further. It was clear from preliminary trial hearings that the plaintiffs were ready to present detailed evidence of how senior executives of the companies reached an agreement not to compete for each other's top job candidates. If the companies had not settled and lost the case in court, they could have ended up paying billions of dollars in court-ordered restitution. This eWEEK slide show highlights some of the facts that came to light during the pretrial investigation.

 
 
 
  • 10 Facts Revealed in the Silicon Valley Antitrust Hiring Lawsuit

    by Don Reisinger
    1 - 10 Facts Revealed in the Silicon Valley Antitrust Hiring Lawsuit
  • Apple Tried to Preserve Steve Jobs' Image

    Apple was extremely aggressive in its dealings with the court prior to the settlement. Just a week before the settlement, Apple requested that emails sent between Steve Jobs and Google Executive Chairman (then-CEO) Eric Schmidt be stricken from the record. It was believed that the company had such trouble with the emails because it not only would hurt the case, but also harm the image of Apple's founder, a man respected and beloved by so many. In one email exchange, Jobs sent a "smiley" face to an HR executive after he learned that Google fired a recruiter for poaching an Apple employee.
    2 - Apple Tried to Preserve Steve Jobs' Image
  • Eric Schmidt Worried a Lawsuit Was Coming

    According to documents obtained through the discovery phase of the case, Google's Eric Schmidt was concerned that the deal between the companies could prompt a lawsuit. In a discussion with an HR director at Google who asked if the no-poaching policy could be shared with others, Schmidt said that he wanted it to be shared "verbally, since I don't want to create a paper trail over which we can be sued later."
    3 - Eric Schmidt Worried a Lawsuit Was Coming
  • This Is Actually the Second Group of Settlements

    Although this latest settlement is making headlines, it's actually the second one related to this case. Pixar and Lucasfilm, along with financial software maker Intuit, agreed to a settlement with engineers that sued the companies over hiring practices. Disney, which owns Pixar and Lucasfilm, paid $9 million to settle the case, while Intuit doled out $11 million. One interesting thing to note: Jobs once owned Pixar, and the Apple co-founder played an integral role at Disney in the early 2000s.
    4 - This Is Actually the Second Group of Settlements
  • Facebook Wanted No Part of the Deal

    It's nice to see that at least one company didn't want to get involved. According to reports, Google approached Facebook COO Sheryl Sandberg in 2008, asking to agree not to poach the search company's employees. Sandberg declined the offer and, as history has shown, wasn't shy about hiring Google engineers whenever possible.
    5 - Facebook Wanted No Part of the Deal
  • Even Palm Played a Role

    Mobile device maker Palm found its way into the middle of the anti-poaching scandal prior to Hewlett-Packard acquiring it. According to court documents, Jobs threatened Palm for targeting Apple employees. According to the documents, Jobs told Palm's then-CEO Edward Colligan that if he didn't stop targeting Apple employees, the iPhone maker would launch a patent lawsuit against Palm. Colligan reportedly responded by saying that he wasn't "intimidated" by the threat, adding that such a move would be "likely illegal."
    6 - Even Palm Played a Role
  • Firings Weren't Out of the Ordinary

    Unfortunately, some people were fired as a result of the anti-poaching agreements. In one instance, Google's Eric Schmidt told Jobs that he would fire a recruiter who went after Apple employees, despite that person having no knowledge of the executives' agreement. In another instance, Schmidt told Intel's former CEO Paul Otellini that if he discovered one of his recruiters targeting an Intel employee, he'd fire that person. It's believed the other companies would offer similar action as part of the deal.
    7 - Firings Weren't Out of the Ordinary
  • It's Unclear Why the Plaintiffs Settled

    One of the big question marks surrounding the case is why the plaintiffs, some 64,000 engineers and programmers, decided to settle for such a small amount rather than battle it out in court next month. The plaintiffs' spokespeople say that they were confident in their case but were concerned with going up against the high-paid attorneys on retainer at big companies. Others, however, have suggested that while the case might have been won in a lower court, it would have been tossed out in a higher court on the ground that the engineers couldn't form a class to take on the companies, since it's possible many of them weren't affected by the alleged deals.
    8 - It's Unclear Why the Plaintiffs Settled
  • The Execs Would Be Dragged Through the Mud

    The companies, meanwhile, seemed to have every intention of settling the lawsuit with as little cost and trouble as possible. The plaintiffs made it abundantly clear in court documents that they wanted to show the jury as many unsavory emails between executives and employees as possible. That would have been a PR nightmare, and something none of the companies involved in the case wanted to see.
    9 - The Execs Would Be Dragged Through the Mud
  • The Executives Were Careless

    There's no doubt about it: The executives involved in this case were extremely careless. From Apple and Google's exchanges to Intel's Otellini saying in an email that he had a "handshake 'no recruit'" with Eric Schmidt that he didn't want "broadly known," the executives harmed their own chances of defending themselves in the case. Why executives who allegedly had off-the-record conversations would then put them on-record in text is something none of the firms has been able to explain. It was a massive blunder that's costing the companies serious cash.
    10 - The Executives Were Careless
  • The Companies Have Their Say

    Although the companies involved in the lawsuit stopped short of confirming or denying the charges in the lawsuit, a few, including Intel and Adobe, had something to say on the matter. Both companies issued the same statement, saying that their decision to settle was based in their desire "to avoid the risks, burdens, and uncertainty of ongoing litigation." And that is likely to be the last word on this case, unfortunately.
    11 - The Companies Have Their Say
 
 
 
 
 
 
 
 
 
 
 

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