Lawsuit Filed Against Apple and Other Tech Companies Over Anti-Poaching Agreements

[MacRumors]

Law firm Lieff, Cabraser, Heimann & Bernstein today announced the filing of a class-action lawsuit against Apple and other tech companies over "no solicitation" agreements that prevented the companies from attempting to hire away each others' employees. The lawsuit, filed by former Lucasfilm engineer Siddharth Hariharan, contends that the anti-poaching agreements limited career opportunities for and instituted artificial salary caps on employees at the companies involved."My colleagues at Lucasfilm and I applied our skills, knowledge, and creativity to make the company an industry leader," stated Mr. Hariharan. "It's disappointing that, while we were working hard to make terrific products that resulted in enormous profits for Lucasfilm, senior executives of the company cut deals with other premiere high tech companies to eliminate competition and cap pay for skilled employees."

"Competition in the labor market results in better salaries, enhanced career opportunities for employees, and better products for consumers," stated [attorney Joseph] Saveri. "We estimate that because of reduced competition for their services, compensation for skilled employees at Adobe, Apple, Google, Intel, Intuit, Lucasfilm, and Pixar was reduced by 10 to 15 percent. These companies owe their tremendous successes to the sacrifices and hard work of their employees, and must take responsibility for their misconduct."The lawsuit alleges that the "no solicitation" agreements first surfaced in 2005 between Lucasfilm and Pixar, with Adobe, Apple, Google, Intel, and Intuit all joining the coalition that remained in place until at least 2009. The complaint seeks restitution for lost compensation and treble damages as punishment for the anti-competitive actions.

Specific claims of Apple's involvement in such anti-poaching agreements surfaced in August 2009 when a deal with Google was revealed. The U.S. Department of Justice finalized a settlement in September 2010 that barred Adobe, Apple, Google, Intel, Intuit, and Pixar from participating in such arrangements.

Article Link: Lawsuit Filed Against Apple and Other Tech Companies Over Anti-Poaching Agreements

 

[Small White Car]

Does seem kind of shady.

I have no clue how the law will actually view this, though.

 

[Dr McKay]

Why? Offering an employee a better job?

The only condition is you shouldn't be able to tell your new employer anything about your old company.

 

[wackymacky]

Is there something in this, or is it just a case of a resentful ex-employee?

Just because they agree not to poach (they won't headhunt a specific person), they can advertise freely what ever salary for a position, who ever wants can apply, and resign from their current job.

 

[Satori]

More good news... for lawyers

 

[NebulaClash]

Ah, excellent. Here we have a story all about legal issues, knowledge of which in these forums is nil. So instead of talking about the actual legal issues of the case, we will get Apple-is-great or Apple-is-evil comments depending on the personal agenda of the poster regardless of the facts of this case.

Let the lawyers do the talking. They are the only ones who know the legal facts here.

 

[Small White Car]

Is there something in this, or is it just a case of a resentful ex-employee?

Just cecasue they agree not to poach (they and headhunt a specific person), they can advertise freely what ever salary for a position, who ever wants can apply, and resign from their current job.

The way they're talking about all this I get the impression that "agree not to headhunt" is not the only thing going on here. I have no details myself, but from what I've read it sure sounds like their lawyers are prepared to make a much bigger case than just that.

 

[Themaeds]

Is there something in this, or is it just a case of a resentful ex-employee?

Just because they agree not to poach (they won't headhunt a specific person), they can advertise freely what ever salary for a position, who ever wants can apply, and resign from their current job.

There def is some merit to this argument but there could be a no compete claus. If that's the case then this lawsuit seems very valid. Probably wont amount to much however

 

[plokoonpma]

The DOJ already ruled this and the parties involved settled... At least these companies have that for their defense.
I agree that such agreement or practice goes against employees but how you can prove that you got affected and lost money or better employment???

well.. time will tell..

 

[ktappe]

Good

This certainly sounds as if it has merit. It's a blatant circumvention of the "free market" that many politicians, voters, and businessmen openly and frequently support. Now let's see how many of them actually believe in the "free market" by supporting this suit. Or will they oppose this suit and expose themselves as actually being "pro business" and anti worker. It's funny how many forget that "free market" should apply to all portions of the economy, including the workers.

 

[Popeye206]

What junk! People will sue over anything these days.

Personally, I think the anti-poaching is good. If someone wants to look for a job with another... fine, but for each to be trying to steal the others best talent is defocusing and a waste.

 

[nwcs]

The plaintiffs will have a hard time quantifying the damages. It's all speculation and supposition. I would not be surprised to see this either settled or dropped. From what I've read the companies agreed not to go after other companies employees but those employees could initiate on their own. That probably takes some steam out of their argument, if true.

 

[maclaptop]

Ah, excellent. Here we have a story all about legal issues, knowledge of which in these forums is nil. So instead of talking about the actual legal issues of the case, we will get Apple-is-great or Apple-is-evil comments depending on the personal agenda of the poster regardless of the facts of this case.

Let the lawyers do the talking. They are the only ones who know the legal facts here.

Well said, taking legal action on this type of case involves facts, heresay and more minutia than one can imagine.

 

[JAT]

Ah, good. Back to a lawsuit of a rich guy suing a richer guy because rich guy isn't rich enough. Hopefully they won't say something foolish like anything about "the man".

Congrats to the lawyers that become rich due to such work.

 

[AP_piano295]

What junk! People will sue over anything these days.

Personally, I think the anti-poaching is good. If someone wants to look for a job with another... fine, but for each to be trying to steal the others best talent is defocusing and a waste.

If thats as far as their agreement goes fine, but it seems that agreements like these might make it a lot harder for workers to look outside their company without receiving unwanted attention from the company they are already employed by.

It sounds iffy legal behavior and I'm not opposed to it being shot down.

 

[Keebler]

Ah, excellent. Here we have a story all about legal issues, knowledge of which in these forums is nil. So instead of talking about the actual legal issues of the case, we will get Apple-is-great or Apple-is-evil comments depending on the personal agenda of the poster regardless of the facts of this case.

Let the lawyers do the talking. They are the only ones who know the legal facts here.

i think you're completely right about the first part (lack of legal issue knowledge), but I don't see how this is going to end up with posters saying apple is is great or evil.

I think it has nothing at all to do with Apple, but with the larger group of companies mentioned, including Apple.

Regardless, it will be interesting to find out the facts. If there was collusion on the part of the companies to cap salaries - is that wrong? or right? If there are no industry standards b/c there's no union, then how else are salaries priced? Is it a free for all and companies want to protect themselves from paying too much? or maybe they are indeed being cheap. Maybe there needs to be a 'creative talent' union? Then again, unions have hurt themselves. They can be good and bad.

I'd like to keep interested although it has no personal bearing.

 

[CalBoy]

Is there something in this, or is it just a case of a resentful ex-employee?

Just because they agree not to poach (they won't headhunt a specific person), they can advertise freely what ever salary for a position, who ever wants can apply, and resign from their current job.

Agreeing not to go after each other's top talent is a crime known as collusion, and more broadly it is the beginning stages of a trust. The competitive element of the market is completely destroyed if demand is being artificially suppressed.

There def is some merit to this argument but there could be a no compete claus. If that's the case then this lawsuit seems very valid. Probably wont amount to much however

Non-compete clauses are very tightly restricted in California. They only allow for trade secret protection and sensitive document protection. Thus, a former Pixar employee could not reveal to Lucasfilms what their next big project is, but he would be perfectly free to leave Pixar for Lucasfilms.

The DOJ already ruled this and the parties involved settled... At least these companies have that for their defense.
I agree that such agreement or practice goes against employees but how you can prove that you got affected and lost money or better employment???

well.. time will tell..

The Federal government settled a criminal prosecution. This is a civil lawsuit on the part of the injured employees.

I haven't taken a look at the full lawsuit yet, but I suspect that the plaintiffs are trying to make use of the Sherman Anti-Trust which allows for triple damages by default.

 

[kerryb]

boo hoo

As much as I agree with this suit in principle and I think talent should be rewarded we are not speaking about low paid employees in this case. I wish somebody would sue on behalf of all the working poor in this country. Large company's that use temporary or part time employees to avoid paying benefits, raises and can terminate them when time for pay raise in due.

 

[smithrh]

As someone from one of the purported companies that agreed to this, you can rest assured I am very much unhappy with this arrangement and it needs to be quashed - permanently.

Let's say I want to work for Apple - well, maybe they won't contact me, or they'll send my CV that I send to them to the shredder without reading it through. All because of where I work now.

Bluntly speaking - that's crap.

 

[gkarris]

Time for the Lawyers to upgrade their Yachts this Summer...

 

[SeattleMoose]

Figured Out Why Microsoft Not Mentioned...

"We estimate that because of reduced competition for their services, compensation for skilled employees at Adobe, Apple, Google, Intel, Intuit, Lucasfilm, and Pixar was reduced by 10 to 15 percent. These companies owe their tremendous successes to the sacrifices and hard work of their employees, and must take responsibility for their misconduct."

The key words are .... "skilled employees"

So how is the Zune doing? Or that partnership with Nokia?

 

[Foxer]

working hard to make terrific products that resulted in enormous profits for Lucasfilm

Is he talking about the Prequels?


Actually, I think the operative thing is whether the agreements btw the employers prevented them from ACTIVELY seeking out employees in other gigs, or went so far as to be an agreement not to even consider an applicant if s/he happened to work at one of the other parties to the agreement. I think, if it is the later, it could be problematic.

And this has nothing to do with non-compete clauses. Those are between employees and their current employer. This would be an agreement btw entities to agree not to compete over labor, which COULD be collusion in the sense of antitrust law, and thus this suit.

 

[ellsworth]

Ha... only in America.

 

[100Teraflops]

Well, it appears that Apple is sued as much as they sue. Also, where is the love for our legal amigos? Back to the current lawsuit.

There is much truth to that claim, but like another forum stated: "I have no clue how the law will actually view this, though."

The lawyers working for Lucasfilm will have their work cut out for them by providing ample and significant evidence and making it stick.

 

[danielwsmithee]

As an engineer these agreements are crap and should be squashed harshly. It is the engineers and designers that make the products Apple creates. Apple makes plenty of money to pay fair market wages.

A lot of this comes from the fact that in engineering you are largely rewarded by jumping from company to company every 5-10 years. That is just my experience working in the industry. Companies don't do a good enough job advancing from within. With the demise of pension programs there is much less incentive to stick with a single company for 20+ years like there use to be.