Google, Apple, Intel, Adobe Agree to $324M Settlement in Salary Case
The settlement ends a class-action lawsuit that had been filed against the companies, alleging that they conspired to hold down employee salaries by not poaching workers from each other.Google, Apple, Intel and Adobe will pay a total of $324 million to settle a class-action lawsuit that alleged that the companies were illegally conspiring to control salaries by not recruiting employees who worked for rival companies. The settlement was reported April 24 in a story by Reuters, which added that the payment agreement comes just weeks before a very high-profile trial would have begun. The original lawsuit, which was filed on behalf of some 64,000 workers in 2011, accused the companies of "conspiring to hold down salaries in Silicon Valley, sources familiar with the deal said," according to the story. The lawsuit alleged that the four companies "conspired to refrain from soliciting one another's employees in order to avert a salary war." The lawsuit sought $3 billion in damages for the plaintiffs, which "could have tripled to $9 billion under antitrust law," according to Reuters. "The case has been closely watched due to the potentially high damages award and the opportunity to peek into the world of Silicon Valley's elite. The case was based largely on 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." The companies allegedly discussed matters about potential employee hiring in emails back and forth, the story reported. "In one email exchange after a Google recruiter solicited an Apple employee, [Google's] Schmidt told Jobs that the recruiter would be fired, court documents show," Reuters reported. "Jobs then forwarded Schmidt's note to a top Apple human resources executive with a smiley face."
Schmidt, in another email exchange with Google's human resources director, advised discretion when the director asked Schmidt about "sharing its no-cold call agreements with competitors," the story reported. "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 wrote back, according to a court filing described by the story.