updated 01:38 am EST, Wed January 15, 2014
Apple, Google, Adobe, Intel, others accused of conspiracy
What started out as an informal "gentlemen's agreement" between tech competitors to stop "poaching" each other's employees has turned into a major legal headache for a number of Silicon Valley firms, with class-action status re-affirmed on Tuesday with a denial of the defendant companies' permission to appeal request. Some 64,000 employees of the named firms can now proceed with a trial that charges the companies of conspiring to suppress wages and opportunities.
While its unclear if it was intended by the companies in question, the employees who originally brought the suit complained that the agreement -- intended to benefit all parties in stopping aggressive and disruptive recruiting between tech rivals -- denied them opportunities for advancement, the leverage to negotiate higher salaries and the ability to work for rival companies once they had left their current employer. In particular, the plaintiffs claim, the agreement worked to suppress pay rates throughout the industry.
Judge Lucy Koh, who had originally denied the class-action status, later reversed herself when the plaintiffs were able to produce more evidence of harm resulting from the agreement. In denying the request to appeal her reversal, she said that a trial over the methods used by the defendant companies can go ahead, and is currently scheduled to begin on May 27.
The tech companies named in the lawsuit include Adobe, Apple, Google, Intel and Pixar among others. In the latest round, the companies had argued that so many disparate types of employees (with over 2,400 job titles between them) were involved in the case that the accusations could not represent an cohesive "overarching conspiracy."
Steve Jobs, who was at the time head of both companies, is specifically named in the suit, though the only evidence thus presented on that point is a single email to Google then-CEO Eric Schmidt (who was on Apple's board at the time) asking him to personally intervene in the case of what Jobs felt was an overly-aggressive recruiter trying to poach an existing Apple employee.
Schmidt immediately agreed to the request and later had the recruiter fired. Whether this was simply Jobs intervening in a single incident -- possibly at the request of the affected employee -- or outrage that a pre-existing agreement was being violated isn't yet clear, but will likely be put into context during the trial.