Four of Silicon Valley’s largest tech companies, Apple, Google, Adobe and Intel, have agreed to a $415 million settlement over claims that they conspired with one another in their employee hiring practices in order to stifle competition and suppress wages.
The settlement puts an end to a class-action lawsuit filed in 2011 on behalf of more than 64,000 programmers and engineers against Apple, Google, Intel, Adobe, Lucasfilm, Pixar and Intuit. The lawsuit claimed the defendants entered into a series of agreements with each other not to recruit or hire each other’s employees. This included a strict policy to refrain from soliciting, cold calling, recruiting, or otherwise competing for employees.
The plaintiffs alleged that the companies were in violation of state and federal antitrust laws that prohibit practices intended to limit employee’s power to negotiate for higher salaries.
Evidence of the pact included troves of embarrassing email conversations between high-ranking executive officers of the companies that detailed the anti-competitive agreement. In at least one such email, a top executive assured his rival of the swift termination of a recruiter who had dared to violate the pact. Other emails discussed the handshake agreement and its need to be kept quiet in order to avoid a lawsuit.
Lucasfilm, Pixar, and Intuit reached an earlier settlement of $20 million. Apple, Google, Adobe, and Intel agreed to the $415 million settlement after a previous $324.5 million proposal was rejected in August on the grounds that it didn’t offer enough money for the affected workers.
The companies likely agreed to the deal in order avoid the risk of further litigation. If no settlement was made, the case was set to go before a jury this spring. A loss could have resulted in damages exceeding $9 billion, in addition to marring the public’s perception of the tech powerhouses.
This most recent settlement amounts to approximately $6,400 per employee. The companies have also agreed to refrain from restricting hiring and recruiting practices among themselves.
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