Half-hour film includes commentary from Lieff Cabraser Antitrust & Employment Law partner Dean Harvey on the civil Apple/Google/Intel et al. lawsuit initiated by our firm
In the wake of the successful and precedent-setting lawsuit against numerous tech giants of Silicon Valley, David Donnenfield of Full Frame Productions and Kevin White of Filmmakers Collaborative SF have released “When Rules Don’t Apply,” a new short film highlighting the pivotal legal antitrust actions brought by Lieff Cabraser and its co-counsel against Google, Apple, eBay and other major hi-tech players over the illegal suppression of employee wages and restrictions on employee mobility.
Co-hosted by Rachael Myrow, KQED’s Silicon Valley chief, and Veena Dubal, Associate Professor of Law at UC Hastings, When Rules Don’t Apply explores the “no-poach” wage suppression conspiracy that swept Silicon Valley from 2005 to 2015, and the precedent-setting legal war that triumphantly challenged these practices. The film reveals how leading tech CEOs, including Apple’s Steve Jobs, Intuit’s Bill Campbell, and Google’s Eric Schmidt secretly agreed not to recruit one another’s employees, restricting employee job opportunities and powerfully limiting their wages.
The film shows how the U.S. Department of Justice first applied antitrust law in 2009 in the labor arena to prosecute a group of high-tech companies over anticompetitive practices. The film includes commentary from a leading experts in the field of antitrust and labor law, including Lieff Cabraser partner Dean M. Harvey, who co-represented the 64,000 tech workers in the groundbreaking class action lawsuit filed in 2013 over an estimated $3 billion in lost wages. The landmark case resulted in a settlement of $435 million, the largest recovery (by far) of any class action asserting antitrust claims in the employment context. The case was also widely recognized as a legal and public policy breakthrough.
When describing how antitrust law can be applied in employment settings, Lieff Cabraser’s Dean Harvey explains that “when you have employers who are competing with each other for employees, they are direct competitors, in the same sense as direct competitors for products. And the antitrust laws apply in the exact same way, and they provide the same protections to employees in the marketplace as they provide to consumers in the marketplace, who want products that aren’t priced artificially high because of a price-fixing conspiracy.”
As the film points out, in the wake of the Department of Justice’s lawsuit and settlement, “a national law firm’ [Lieff Cabraser] thought there might be grounds for a class action lawsuit on behalf of the victims.” Harvey recalls: “I remember the moment I first learned of the case, I was sitting on a bus in san Francisco on my iPhone reading the New York Times, and saw that story, and thought, that is so fascinating. And the DOJ did not make any attempt to try to quantify the harm, or to try to show exactly who was injured by the misconduct. So that was the end of the matter as far as the Department of Justice was concerned. We just kept thinking about it and thinking about it. And no one filed a civil case, which gave us a bit of pause, because we wondered why no one was [filing].
Lieff Cabraser partners (from left) Dean M. Harvey, Kelly M. Dermody, Brendan P. Glackin, and Anne B. Shaver
“Because a case like this had never been brought,” Harvey continues. “So our first step was to try to figure out what the misconduct was, and to make sense of it. So we had a diagram of these different agreements, and they seemed to all be connected, we then did an analysis, and we came to learn that two individuals were connected to every agreement at issue. Steve Jobs and Bill Campbell. Steve Jobs everyone knows, but Bill Campbell is not so well known publically, but in the Valley he’s a legend.”
Harvey sums up the widespread harm that led to the class action: “The damages to the class in this case took two forms. One was suppressed pay; we estimated that amount to be three billion dollars across the class. The other form of harm was suppressed career mobility, and what we know from labor economics is that when you are denied an opportunity, it suppresses your pay and your career prospects the rest of your career.”
As Barry Lyon, Executive Director of theOpen Markets Institute notes, “This case shows that the law itself remains robust enough to still be used by smart lawyers, by smart citizens against the powers that exist. Antitrust was designed to establish freedom in the marketplace, it was designed to prevent concentration of power over the marketplace, it was designed to prevent concentration of power within the political system. And the reason that we want there to be multiple buyers is so that we’re never dependent on any one person, on any one corporation. Because it is through independence that we become free.”
As the filmmakers summarize, “With [the High-Tech Antitrust Employment] case, we’ve actually entered a new era of antitrust law enforcement, where the law can be applied on behalf of labor. Not just in the high tech industry, but in any market sector where companies conspire to cheat their workers.”