Apple Sued by Shareholders Over Anti-Poaching Agreements with Other Companies

Discussion in 'MacRumors.com News Discussion' started by MacRumors, Aug 15, 2014.

  1. macrumors bot

    MacRumors

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    Apple shareholder R. Andre Klein is suing Apple on behalf of all of its shareholders over the company's anti-poaching agreements, reports Patently Apple.

    The lawsuit claims that Apple's no-hire agreements with other companies including Google, Adobe, and Intel caused the company to grossly mismanage its assets, mislead its investors, breach the duty of "honest services", and hurt its overall value. The suit seeks damages for all shareholders through a jury trial, and names a number of Apple executives as individual defendants including current CEO Tim Cook and even former CEO Steve Jobs.

    The suit follows a rejection of a $324 million settlement proposal between the four tech companies and tech workers by a California court. In the filing's court documents, Judge Lucy Koh stated that the total settlement "falls below the range of reasonableness" when compared a $20 million settlement given last year by Pixar, Lucasfilm, and Intuit. Comparatively speaking, Apple and others should pay a minimum of $380 million.

    Employees of the various tech companies originally brought forth a lawsuit against the companies no-hire agreements in 2011, with a trial revealing anti-poaching tactics dating back to 2005. The United States Department of Justice intervened in the case in 2010, forcing the companies to stop engaging in anti-poaching agreements. However, the class-action civil lawsuit brought against the aforementioned companies by over 64,000 employees will remain open until a settlement has been reached.

    Article Link: Apple Sued by Shareholders Over Anti-Poaching Agreements with Other Companies
     
  2. macrumors regular

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    #2
    Apple should come to realize that it is not above the law. I guess it sees paying a severel hundred million dollar fine as a cost of business to keep its talent from jumping ship to other tech companies.
     
  3. macrumors 6502a

    ZacNicholson

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    #3
    surprised it wasnt this guy
     

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  4. macrumors regular

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  5. macrumors 6502a

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    #5
    lets all pitch in trillions of dollars to take Apple back into a private company.
     
  6. macrumors regular

    mdridwan47

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  7. writingdevil, Aug 15, 2014
    Last edited: Aug 15, 2014

    macrumors regular

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    Specious claims, as: "defendants' actions allegedly forced Apple to spend a huge amount on expenditures related to "years of lost opportunities to hire more qualified employees that were employed at other companies".
    This is nothing but a claim based on...nothing, saying IF Apple could have poached, they would have been more profitable? Is that a crystal ball prediction? One could easily argue the opposite considering Apple's financial growth over a longer period.
     
  8. macrumors 68030

    needfx

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  9. macrumors 6502

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    #9
    This is stupid. If you sue a company you partially own, you're essentially suing yourself.

    If there's a settlement and Apple pays out 100 million to share holders, the company is suddenly worth 100 million less. The shareholders gain nothing.
     
  10. macrumors regular

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    #10
    I love this.
    And suing the company doesn't affect market value?!?

    Just be honest, homie wants some money
     
  11. macrumors 68020

    keysofanxiety

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    #11
    I'm not sure if you've both been following this story, but this isn't a random lawsuit. The big companies all got together to stop them 'poaching' their other employees. This essentially means that if you were working for Apple, Google, or Adobe (to name a few) you couldn't get hired by the other company. There's even an email shown where Steve Jobs was going mad at Google over them trying to hire an Apple employee.

    This severely screws over the hard-working employee. It means that they don't have an opportunity to work in another large tech company. It also means they don't have much to go on when negotiating for wage, because they're not going to be offered a job by their direct competitors.

    It's evil, immoral, and shameful.
     
  12. macrumors 6502a

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    #12
    i wanna punch this andre whatever. is he crazy? :mad:
    he is suing himself to make the lawyers richer...?
     
  13. Moderator

    maflynn

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    #13
    Except what they did wasn't right. I'm not sure why shareholders are getting into the act but I know the government was (is?) looking into the anti-poaching stuff
     
  14. macrumors 6502a

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    #14
    i wish banks had this agreement. then we wouldnt have hedge fund managers and the likes earning multi million dollar bonuses to play poker with ppls money.
     
  15. macrumors 68020

    keysofanxiety

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    #15
    Heh, it'll definitely take more than an anti-poaching agreement to sort out the banks. :(
     
  16. macrumors G4

    Small White Car

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    #16
    This is probably one of the worst things Steve Jobs was ever involved in. This was really bad and Apple deserves punishment.

    And furthermore, as a shareholder, I can say that... It was the WORKERS who were harmed, not me. I don't deserve %^%] over this. This guy is a dope.
     
  17. macrumors 603

    apolloa

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    #17
    Their is nothing to stop a person themselves switching between the companies, it's not as though they are all now banned from working for any of the other companies under their own free will.
    This is a sensible solution as these companies now their competitors won't be actively approaching their employees when said employees aren't looking for new employment.
     
  18. gavroche, Aug 15, 2014
    Last edited: Aug 15, 2014

    macrumors 6502

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    #18
    Yikes. While I would agree that society could decide this is a practice it does not want to condone... to say it is "evil" or "immoral" or "shameful"... that is crazy. These companies entered these agreements because they were spending a lot of money and time to educate these employees, and in the process give them a lot of insider knowledge of their business. They merely sought to prevent another company from swooping in and stealing that employee once he is trained (for a lot less money).
    Think of it this way: suppose it costs $100,000 to properly train an employee to your industry standards. Suppose you just spend several years doing so. The moment that you do, company Y comes in, and offers that employee a salary package that provides him $90,000 more than you are offering him. He will be highly tempted to jump ship for that much more money. And it's cheaper to company Y to do this than spend the full $100,000 to train.
    You may not think that a company seeking to avoid this should do so. But "evil".... really?
    And furthermore, out of curiosity, do you likewise then think that agreements where companies offer to pay to send you to college and get a degree, in exchange for you agreeing to stay and work for their company for a specified number of years (to make it worth it to them to front the cost of your education)... is that evil, immoral, shameful? Should these opportunities for people to get a college degree that they could not otherwise afford be ended?

    p.s. I agree with prior posters that for there to be a shareholder lawsuit on this is pointless. Shareholders would be paying themselves any settlement or victory money. Minus lawyers fees. It's a guaranteed lose money situation.
     
  19. macrumors 6502

    GadgetDon

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    #19
    You're close, but one crucial difference. You couldn't get RECRUITED by the other company, they couldn't say "I have a new position and George over at Apple would be great for it, let's see if he's interested." But if George hears about a new position and applies for it, or even does some networking "would you be interested in me if I was to apply for it", George can get the job.

    And there's some background - there was a thing called predatory recruitment, where, having heard about a big new project at your competitor, you hire away the people working on the project to at least delay if not completely kill the project. They didn't want the employee, they just wanted to kill the project (and the employee soon discovered at the new place that he wasn't really wanted and promises implied weren't kept). This proved to be less than great for the employee, having left a solid job (and particularly if they moved to, oh to pick a place at random, Redmond WA).

    Yes, it was still wrong. They deserved to lose that lawsuit. But it's neither as bad as some had stated nor came out of nowhere.

    This lawsuit, however, by the shareholder, is a money grab. It may be a successful money grab - there were bad actions involved, it'll be a chance for the people on the jury to say "it was wrong" and the fact that they're compensating someone not hurt may not be important to them.
     
  20. macrumors 68020

    keysofanxiety

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    Hi GadgetDon, thank you for your detailed response -- I think I understand it all a little better now.
     
  21. macrumors 6502

    Bug-Creator

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    #21
    Yeah, thats why those employees have a right to sue Apple&Co.

    Shareholders on the other side will have a hard time argueing how that has hurt them (I'd say it quite clearly benefited them).

    Just another case of bunch a 2bit lawyers finding some suckers....
     
  22. macrumors 68020

    s2mikey

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    #22
    Wow, as if shareholders haven't done enough damage to this country and people's lives already over the last twenty years or so. These are the folks responsible for outsourcing all of our jobs, putting immense pressure on companies for unrealistic results, and of course causing various amounts of grief for employees everywhere.

    I hope apple wins this one.....
     
  23. eswinson, Aug 15, 2014
    Last edited: Aug 15, 2014

    macrumors newbie

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    #23
    I agree that it screws over employees, but never before had it been argued that it screwed over one of the companies. In this case Apple. If it was disadvantageous to Apple in any way, why did they do it? Not losing key employees because of poaching would have been considered a positive. Arguing that they were unable to hire key people from Google and others means, that doing so, they would have risked losing key people therefore the net gain of talent would have potentially been a wash. Claiming it affected Apple's performance seems to ignore the fact that while the anti-poaching agreement was in place Apple recorded the greatest profits, enjoyed the highest stock price and generally performed better than it ever had in its history. Since the practice had stopped Apple has had a roller coaster of a ride in the stock market and has yet to come close to recapturing its all time high.
     
  24. macrumors G5

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    #24
    I am all for the employees who were affected having their day in court.

    While investors are affected by the business decisions a company makes - they are going to have a hard time in court proving harm or loss of income if they invested after Jobs' return to the company.

    Not a great analogy - but it's like Apple lamenting to the judge over the loss income from Samsung phones at the same time shouting the enormous profits and units they sold q over q.
     
  25. macrumors regular

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    Dec 29, 2012
    #25
    I totally agree. And I agree Apple and the other companies should be sanctioned by the regulatory authorities and the workers concerned, as they have been (or are in the process of being).

    But shareholder lawsuit? Shareholders benefited by these anti-competitive practices. You can bring a shareholder lawsuit for anything these days. There is no penalty for suing. The goal of the operation is the lawyers' fees.

    The settlement, if there is one, is typically minuscule per share - of the order of cents per share, so shareholders will not benefit.

    The threat is, we'll use up your time and legal resources at great cost to you, while simultaneously trying to inflict as much damage to the brand as possible in the media. We will request you hand over all relevant information such as emails, minutes of private meetings, contract negotiations, which we will then make public. We'll find out what departments are hiring and what your plans are.

    Or this can all go away, if you agree to an out of court settlement. It's a shakedown.
     

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