updated 09:50 pm EST, Thu January 17, 2013
Tech giants may have flagrantly violated 2010 agreement with DOJ
At a hearing in San Jose, California federal court on Thursday, US. District Judge Lucy Koh ordered Apple CEO Tim Cook to be deposed by plaintiff attorneys in a case alleging an agreement between Silicon Valley tech giants to not poach each other's employees. The judge believes that internal emails prove that the companies felt the agreement would provide financial benefits to each other, despite the accord being in violation of Federal law.
Judge Koh's hearing was intended to decide if the lawsuit will proceed as a class action, which gives the five former employees who filed the suit a better position to obtain a large settlement from the companies. The judge feels that, at the time the no-poaching arrangement was negotiated, the executives of the companies believed that a collective hiring approach was more efficient than one-on-one dealings with employees. The judge did not rule on the hearing topics today.
Plaintiff attorneys have estimated damages in the suit could run into the hundreds of millions of dollars. Adobe attorney Robert Mittelstaedt, as part of the defense team, claimed that the plaintiffs had no evidence that the employees were actually impacted, financially or otherwise, by the deals between the companies' CEOs.
Such deals risk stifling competition by preventing a natural flow of talent, as well as potentially hurting the employees themselves, as it makes it harder for engineers to discover their true worth to employers. As options for changed employment drop, workers are potentially denied pay increases, bonuses, and other incentives either for joining another company or as retention methods. On the other hand, no-poaching agreements can shield workers from being constantly recruited by competitors, and avoids conflict-of-interest situations where confidential company data may be compromised. The ad hoc deals have since mostly, if not entirely, stopped.