A series of secret pacts among some of the biggest employers in Silicon Valley to cheat their staffers could turn out to be a rather expensive mistake, with Apple, Google, Intel, and Adobe now agreeing to settle the antitrust class-action lawsuit out of court.
"This is an excellent resolution of the case that will benefit class members. We look forward to presenting it to the Court and making the terms available," said Kelly Dermody, co-lead counsel for the plaintiffs.
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The case arose from a Department of Justice investigation into hiring policies in Silicon Valley. The Feds found that Apple started the practice in 2005, with a deal with Adobe that the two firms wouldn't try to hire each other's employees, and pretty soon some of the biggest Silicon Valley firms were screwing their staff with similar secret deals.
Apple, Google, Intel, Adobe, Intuit, and Pixar reached a deal with the DoJ in 2010 over the case, in which they accepted no guilt for their actions and promised not to do it again. However, a class-action suit was filed in 2011 by an ex-employee of Lucasfilm to seek restitution.
In the ensuing trial, it came out that one of the prime movers behind the scam was Steve Jobs, who in 2005 began getting in contact with other CEOs to try and put a brake on competition for the best staff in the technology sector.
"We must do whatever we can to stop cold calling each other's employees and other competitive recruiting efforts between the companies," Jobs said in an email to the former Palm CEO Ed Colligan. To his credit, Colligan refused – even after the Apple boss threatened his company with legal action – saying such an agreement would be illegal
Google's Eric "proudly capitalistic" Schmidt was also a willing participant in the fraudulent scheme. He personally negotiated similar agreements with Intel and Intuit to make sure staff wouldn't be contacted by recruitment firms with tempting – and more lucrative – offers of employment
Facebook chief operating officer Sheryl Sandberg came out of the case slightly better. She claimed that Google approached Facebook about a deal on employees but was turned down, although whether this came from an ethical standpoint or the fact that Facebook was hiring engineers left, right, and center at the time wasn't mentioned.
In October 2013, Judge Lucy Koh ruled that the class action was open to potentially 64,600 former employees of the firms, provided they had worked in a technical role withihin the companies at the time that the deals were in force.
It is not known how many employees signed up, and the precise terms of the class action settlement haven't been disclosed. The plaintiffs were asking for $3bn, and seeing as how it was an antitrust case the court could have chosen to treble the damages to $9bn. However, considering that Pixar, Intuit, and Lucasfilm have already settled for a paltry $20m, it's unlikely that anyone's going to be retiring on the verdict's payout.
But one can hope, can't one? ®