Practice Area: Antitrust & Intellectual Property
Issue: No cold calling, no-hire agreements, suppressed employee wages
Latest Developments in the High-Tech Antitrust Class Action Case
On March 3, 2015, the Court granted preliminary approval to a proposed $415 million settlement with Apple, Inc., Google, Inc., Intel Corporation, and Adobe Systems, Inc.
Earlier, on May 16, 2014, the Court granted final approval to settlements valued at $20 million that had been reached in 2013 with Intuit Inc., Lucasfilm Ltd., and Pixar. That settlement is unaffected by the Court's August 8, 2014 order.
Class Certification and Class Definition
On October 24, 2013, U.S. District Court Judge Lucy H. Koh granted plaintiffs' motion for certification in a class action charging that Adobe, Apple, Google, Intel, and other large tech companies conspired from approximately 2005 to 2009 to suppress the pay of technical, creative, and other salaried employees, including by agreeing not to actively recruit each other's employees.
By certifying the case as a class action, the individual plaintiffs that filed the lawsuit can represent all class members in claims that Adobe, Apple, Google, Intel, and the other tech company defendants violated federal antitrust laws.
The Court certified the following class of approximately 64,600 persons, known as the Technical Class:
All natural persons who work in the technical, creative, and/or research and development fields that are employed on a salaried basis in the United States by one or more of the following: (a) Apple from March 2005 through December 2009; (b) Adobe from May 2005 through December 2009; (c) Google from March 2005 through December 2009; (d) Intel from March 2005 through December 2009; (e) Intuit from June 2007 through December 2009; (f) Lucasfilm from January 2005 through December 2009; or (g) Pixar from January 2005 through December 2009. Excluded from the Class are: retail employees from the class period; corporate officers, members of the boards of directors, and senior executives of all Defendants.
The job titles of persons in the Technical Class include: (1) Software Engineers, (2) Hardware Engineers and Component Designers, (3) Application Developers, (4) Programmers, (5) Product Developers, (6) User Interface or User Experience Designers, (7) Quality Analysts, (8) Research and Development, (9) Animators, Digital Artists, Creative Directors and Technical Editors, (10) Graphic Designers and Graphic Artists, (11) Web Developers, (12) IT Professionals, (13) Systems Engineers and Administrators, and (14) employees classified as technical professionals by their employers.
Partial Settlements Reached
On May 16, 2014, the Court approved the settlements with LucasFilm, Pixar, and Intuit.
Background: Importance of Competition for High Tech Employees
Competition in the labor market results in better salaries, enhanced career opportunities for employees, and better products for consumers. Silicon Valley firms and other high-tech companies owe their tremendous successes to the sacrifices and hard work of their employees, and must take responsibility for their misconduct.
One of the principal means by which high-tech companies recruit employees is to solicit them directly from other companies in a process referred to as "cold calling."
Factual Allegations of the Case: No Cold Calling, No Recruiting, and Limitations on Salary Offers by Adobe, Apple, Google, Intel, Intuit, Lucasfilm, and Pixar
The consolidated complaint seeks lost compensation and treble damages for the alleged anti-competitive employment practices of Adobe, Apple, Google, Intel Corporation, Intuit, Lucasfilm, and Pixar. The complaint alleges the defendants conspired and formed agreements to (1) not recruit each other's employees; (2) provide notification when making an offer to another's employee (without the knowledge or consent of that employee); and (3) cap pay packages offered to prospective employees at the initial offer.
Starting with Lucasfilm and Pixar, and continuing until at least 2009 with all defendants, the companies entered into no solicitation, no cold-calling, no hiring, no poaching, and other anticompetitive agreements, with the intent to reduce employee compensation and mobility. As additional companies joined the alleged conspiracy, competition among participating companies for labor decreased. Compensation of defendants' employees was less than what would have been paid in a properly functioning labor market where employers compete for workers.
The class action followed an investigation by the U.S. Department of Justice. After that investigation was made public, defendants agreed to end the anticompetitive agreements. However, no compensation was provided to employees of defendants. The class action seeks lost pay for the employees who were targeted by defendants' alleged conspiracy.
Earlier Case Procedural History
On May 4, 2011, a former software engineer at Lucasfilm filed a class action lawsuit charging Adobe Systems Inc., Apple Inc., Google Inc., Intel Corporation, Intuit Inc., Lucasfilm Ltd., and Pixar with violations of antitrust laws by conspiring to fix and restrict the pay of their employees and entering into "no solicitation" agreements with each other. Similar complaints were later filed by other employees, and the cases were consolidated before federal Judge Lucy H. Koh under the caption In re High-Tech Employee Antitrust Litigation, Case No. 11-CV-2509-LHK.
On October 24, 2013, as summarized above, the Court granted plaintiffs’ motion to certify the Class. On October 25, 2013, the San Jose Mercury News published an in-depth article on Judge Koh's order. In the article, Lieff Cabraser attorney Kelly Dermody noted that the order sends an important message "that people need to pay more attention to employee rights and fairness in the workplace."
Department of Justice Lawsuit Against eBay Raising Similar Claims
On November 16, 2012, the U.S. Department of Justice and California Attorney General filed lawsuits against eBay alleging that Meg Whitman, the former CEO of eBay, conspired with the top executives of Intuit from 2006 to 2009 to not hire each other's employees, in violation of U.S. and California antitrust laws. The complaint alleges that during that time, eBay's recruiting staff were instructed to throw away resumes that came from Intuit employees.
Contact Lieff Cabraser
Current and former employees of Adobe, Apple, Google, Intel, Intuit, Lucasfilm, Pixar, eBay and other high-tech companies who wish to learn more about this lawsuit or to report their experiences may contact us online by using the form below. Or you may contact a Lieff Cabraser attorney at (415) 956-1000.
All information will be kept strictly confidential as provided under law.