Financial News

  • 27 April 2014, 4:36

Apple And Google Settle Wage-Fixing Court Case

Apple and Google have settled a lawsuit in which they were charged with colluding to hold down salaries by agreeing not to poach each other's staff.

Adobe and Intel were also included in the suit, and all four have now reached an agreement to settle the claims against them.

It has not been disclosed how much - if anything - will be paid to the hundreds or thousands of workers covered under the class action suit.

The lawsuit had claimed $3bn (1.8bn) in damages for more than 60,000 workers. If the four companies had lost the case and damages were awarded, they could have tripled to $9bn (5.4bn).

Lawyers for the plaintiffs alleged senior executives at the firms "entered into an interconnected web of express agreements to eliminate competition among them for skilled labour". The claims dated back to 2011.

The conspiracy allegedly involved agreements not to recruit each other's employees, to notify each other when making an offer to another's employee, and, when seeing an employee in negotiations with one company, not to make a counter-offer to the employee.

The suit said: "The intended and actual effect of these agreements was to fix and suppress employee compensation, and to impose unlawful restrictions on employee mobility."

Sky's Technology Correspondent Tom Cheshire said: "The agreement between Apple and Google was maintained at the highest level.

"Steve Jobs emailed Eric Scmidt, then CEO of Google, to complain about a Google recruiter approaching an Apple employee.

"Schmidt sent a message saying the recruiter had been fired within the hour. Job sent a simple response: a smiley face.

"Since 2010, though, all Silicon Valley companies have abandoned no-poaching agreements - and the competition to recruit the best engineering talent is fiercer than ever."

Three other companies originally named in the suit, Intuit, Lucasfilm and Pixar, settled their cases last July for $20m (11.9m).

That settlement covered fewer than 8% of those involved in the class action suit.

This suggests Thursday's settlement - announced in a statement from a San Francisco district court - could be much higher.

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