Class Action Lawsuit Against Tech Giants Moves Forward

October 29, 2013

Tuesday, October 29, 2013, by Brittany Croom
A judge for the District Court of North California recently granted a motion for class action certification that will allow employees of tech giants Adobe, Apple, Google, Intel, Intuit, Lucasfilm, and Pixar to move forward with a lawsuit to recover alleged damages.  The lawsuit, brought by employees of the tech giants, follows allegations the corporations each violated the Sherman Antitrust Act and the Clayton Act by engaging in a conspiracy to “suppress, and actually did suppress, employee compensation to artificially low levels by agreeing not to solicit each other’s employees.”  In addition to lower wages, they further allege this conspiracy was for the purpose of reducing mobility between employers.

The approved class will include all employees working in technical, creative, research, and developmental positions for Apple, Adobe, Google, Intel, Lucasfilm, Pixar from 2005 to 2009, and Intuit from 2007 to 2009.

The plaintiffs, software engineers who worked for each of the named technical companies, argue a proper labor market would normally include the recruitment of employees presently working at one of the named companies.  They emphasize this method of recruitment, commonly known as “cold calling,” fosters healthy competition among the employers even when the employees have not applied for a particular position.   Instead, the plaintiffs allege the companies conspired to eliminate competition with non-soliticiation agreements that prevented each employer from recruiting one another’s employees and “Do Not Call” Lists exchanged between CEOs.
The class action comes after the Department of Justice settled a related claim with companies in 2010 following an investigation by the Antirust Division for possible antitrust violations. The investigation revealed Apple and Adobe first created a “Do Not Call” list in 2005 after they agreed not to “cold call” each others employees while recruiting.  Similar agreements occurred between Apple and Google, Apple and Pixar, Google and Intel, and Google and Intuit over the course of the following two years. The settlement prohibited the companies from “entering, maintaining or enforcing any agreement that in any way prevents any person from soliciting, cold calling, recruiting, or otherwise competing for employees.” Although the companies agreed to cease entering into future non-solicitation agreements in the settlement, no employees were compensated for their potential harms.  Pixar, Lucasfilm, and Intuit settled individual and class claims in July 2013, but Google, Intel, Apple, and Adobe did not.   Since the settlement with the Department of Justice included a preservation for “plaintiffs’ right to litigate against the non-settling defendants for the entire amount of Plaintiffs’ damages based on joint and several liability under the antitrust law,” it did not affect the employees rights to bring a subsequent class action suit.
The approved class will include all employees working in technical, creative, research, and developmental positions for Apple, Adobe, Google, Intel, Lucasfilm, Pixar from 2005 to 2009, and Intuit from 2007 to 2009. The companies argued the motion for class certification should be denied because the “compensation policies and procedures were highly individualized with wide variation in compensation.”  In approving the class certification, however, the court found that cold calling was an essential element of recruitment and that the absence of cold calling affected the class as a whole by suppressing employee compensation generally.