Tech Heavyweights Settle Wage-Fixing Fight For $324 Million

By David Golden

Google, Apple, Adobe Systems, and Intel have settled an antitrust class action lawsuit brought by software engineers in the high tech industry for a reported $324 million.

The lawsuit, In re High-Tech Employee Antitrust Litigation, alleged that the four companies (along with Intuit, Pixar, and Lucasfilm) agreed to refrain from “poaching” each other’s employees, a common practice in high-tech industries where one company tries to hire the employee of another company.  Experts had estimated damages of $3 billion, which, after trebling under the antitrust laws, could have totaled $9 billion.

Because engineers and scientists who have the experience and skills to build cutting-edge hardware and software products are in great demand, high-tech companies and their recruiters frequently try to attract such employees from other companies with offers of higher salaries and bonuses.  The complaint alleged that the high-tech defendants, in violation of the Sherman Act and California state laws, agreed to not recruit each other’s employees, to notify each other when making an offer to another’s employee, and to refrain from price competition in offering positions to each other’s employees.

The late Steve Jobs played a prominent role in the plaintiffs’ allegations. According to the complaint, in 2005, senior executives of Pixar (of which Jobs was C.E.O at the time) and Lucasfilm initiated the alleged conspiracy by agreeing not poach each other’s employees.  The complaint further alleged that Apple, which was also “under the control” of Jobs around that time, struck similar arrangements with Adobe and Google.  Google, in turn, allegedly made agreements with Intuit and Intel in 2007.  Lucasfilm, Pixar, and Intuit settled the lawsuit in 2013.

The civil lawsuit followed the settlement in 2010 of an investigation by the U.S. Department of Justice into an alleged agreement among Apple, Google, Adobe, and Intel to not “cold call” each other’s employees with unsolicited offers of employment.

– Edited by Gary J. Malone