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

[GadgetDon]

He doesn't have to prove this affected him negatively to win the suit. He only has to prove Apple knowingly disclosed false or misleading information. See my previous comment.

He's not suing Apple. He's suing the people who worked there. So disclosure, if it comes in at all, is shaky grounds.

And while technically he might get a "win" just to show bad behavior, he's suing under the tort system which exists for redressing damage done to people and trying to make them whole again. At most, he might argue if he'd known he would have sold all his stock - and lost out on the run-up so by keeping him in the dark and in the stock the shareholder prospered. Or he can try to make the case that the stock price will drop because of the eventual settlement - hardly.

So if the system really worked like it's supposed to do, determine when people have been hurt and make them whole, this guy would be laughed out of court (hopefully early enough that Tim Cook, the Jobs family, and the other executives aren't drained by legal fees - that in our legal system they won't be made whole if they are found to be innocent). But the system doesn't work like that, they could get a big award just because "bad stuff happened" and a settlement is likely just to avoid the legal fees and the possibility of a big award regardless of the lack of harm suffered by the person.

 

[IJ Reilly]

He's not suing Apple. He's suing the people who worked there. So disclosure, if it comes in at all, is shaky grounds.

And while technically he might get a "win" just to show bad behavior, he's suing under the tort system which exists for redressing damage done to people and trying to make them whole again. At most, he might argue if he'd known he would have sold all his stock - and lost out on the run-up so by keeping him in the dark and in the stock the shareholder prospered. Or he can try to make the case that the stock price will drop because of the eventual settlement - hardly.

So if the system really worked like it's supposed to do, determine when people have been hurt and make them whole, this guy would be laughed out of court (hopefully early enough that Tim Cook, the Jobs family, and the other executives aren't drained by legal fees - that in our legal system they won't be made whole if they are found to be innocent). But the system doesn't work like that, they could get a big award just because "bad stuff happened" and a settlement is likely just to avoid the legal fees and the possibility of a big award regardless of the lack of harm suffered by the person.

Yes, but... it's a class action suit, and the class would have to be all stockholders who held shares during a specified period, so any award would have to be spread out over billions of shares. How could this add up to more than a few dollars for anyone but the very largest Apple shareholders? The only ones who figure to make any money are the plaintiff's lawyers. That said, I don't see Tim Cook or Steve Jobs' estate being "drained" by nuisance lawsuits like this, and in any case, I'd expect them to be dismissed as defendants at the first stop in court.

 

[brendu]

The article is wrong. The suit is a derivative action, which means that the plaintiff is suing on behalf of Apple against the directors of the company for abuse. What gives him standing to sue is the fact that he is a shareholder, which makes him a member of the company.

Okay, thanks for clarifying. That makes much more sense.

 

[GadgetDon]

Yes, but... it's a class action suit, and the class would have to be all stockholders who held shares during a specified period, so any award would have to be spread out over billions of shares. How could this add up to more than a few dollars for anyone but the very largest Apple shareholders? The only ones who figure to make any money are the plaintiff's lawyers. That said, I don't see Tim Cook or Steve Jobs' estate being "drained" by nuisance lawsuits like this, and in any case, I'd expect them to be dismissed as defendants at the first stop in court.

Actually, that's a question - class action suits based on the stockholders - would any award/settlement be divided equally among the class, or based on stock held? I think class actions are always divided among the class. So every stockholder would be given the same, regardless of how many shares.

Fighting a lawsuit like this will be very expensive. And because they're being sued as individuals, they'll have to hire their own lawyers, not use Apple's legal staff.

 

[bpcookson]

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.

Exactly. The fact is that Apple agreed not to poach because it was in their best interest. The stock is arguably worth more because of this, not less.

 

[IJ Reilly]

Actually, that's a question - class action suits based on the stockholders - would any award/settlement be divided equally among the class, or based on stock held? I think class actions are always divided among the class. So every stockholder would be given the same, regardless of how many shares.

Fighting a lawsuit like this will be very expensive. And because they're being sued as individuals, they'll have to hire their own lawyers, not use Apple's legal staff.

I feel certain that Apple Legal will defend them, and even if not, they carry adequate insurance to cover legal representation, and even if not, that being billionaires they will not have their personal fortunes drained by a nuisance lawsuit. In any case I also feel certain that the first motion in a court will be to have any individuals named in the suit dismissed as defendants. Piercing the corporate veil is not an easy thing, with the heavy burden of proof placed on the plaintiffs to show that the named individuals were acting outside of their authority as agents of the corporation, e.g., committed a fraud. And good luck with that.

 

[GadgetDon]

I feel certain that Apple Legal will defend them, and even if not, they carry adequate insurance to cover legal representation, and even if not, that being billionaires they will not have their personal fortunes drained by a nuisance lawsuit. In any case I also feel certain that the first motion in a court will be to have any individuals named in the suit dismissed as defendants. Piercing the corporate veil is not an easy thing, with the heavy burden of proof placed on the plaintiffs to show that the named individuals were acting outside of their authority as agents of the corporation, e.g., committed a fraud. And good luck with that.

I don't think Apple Legal can defend them - the claim is that they harmed Apple, that the stockholders are essentially making Apple sue them. So if Apple's management used Apple's resources to defend them, they'd be compounding the alleged malfeasance.

And don't confuse "high net worth" with "cash-rich". Yes, on paper all these people are well off, but do they have large amounts of ready cash to pay lawyers with? Insurance may cover it, which means the amount they pay for that insurance will go up.

Can it be dismissed quickly? I hope you're right. That will limit the damage inflicted on the defendants. But there will be lots of billable hours before that initial set of motions.

 

[CartoonCat]

This is known as "biting the hand that feeds you".

 

[IJ Reilly]

I don't think Apple Legal can defend them - the claim is that they harmed Apple, that the stockholders are essentially making Apple sue them. So if Apple's management used Apple's resources to defend them, they'd be compounding the alleged malfeasance.

And don't confuse "high net worth" with "cash-rich". Yes, on paper all these people are well off, but do they have large amounts of ready cash to pay lawyers with? Insurance may cover it, which means the amount they pay for that insurance will go up.

Can it be dismissed quickly? I hope you're right. That will limit the damage inflicted on the defendants. But there will be lots of billable hours before that initial set of motions.

If I accused you of committing a land swindle on Mars, that doesn't mean you'd have to hire Martian lawyers to defend yourself.

 

[Tech198]

i can just see the jury now...

"I'm sorry, Mr. Jobs couldn't be with us today."

 

[thekeyring]

lets all pitch in trillions of dollars to take Apple back into a private company.

THIS! They make great products, are very profitable (even after paying staff millions of dollars) and have enough cash tucked away in case there is a rough patch.

But no, they're "failing" or "in trouble" because to create enough money per share to keep the shareholders happy would require an insane amount of new revenue from a new product.

 

[krravi]

Apple is not known for its generous pay. Maybe if they paid the said employees more then could retain them instead of paying millions of dollars on lawsuits.

 

[blouis79]

While the suit may argue damage to shareholder value, it's hard to see that is true for one of the largest corporations on earth which appears to be doing very nicely after rescue from disaster in 1997.

So, is there evidence that the anti-poaching agreements have damaged staff opportunities and corporate wealth???? On the face of it, the company, shareholders and staff are doing very nicely.

 

[ksuyen]

It's evil, immoral, and shameful.

It's not more evil, immoral, and shameful than other companies who try to steal your company hard work by hiring your employers and hide behind "it' my own company, my own employers, outsiders ^&*( off!" statement when discovered. Who is above the law now?

 

[kdarling]

It's not more evil, immoral, and shameful than other companies who try to steal your company hard work by hiring your employers and hide behind "it' my own company, my own employers, outsiders ^&*( off!" statement when discovered. Who is above the law now?

Every company hires people (or buys out their companies) who have good ideas, and thereafter claims those ideas as their own.

Google and Apple do this constantly. Android. Robots. Multi-touch. Fingerprint sensors.

Apple under Jobs, especially, depended on enticing top workers from other companies.

For example, Apple actively recruited many top Xerox Parc employees. Not just hoped they might.

Later, when Jobs got kicked out of Apple, he recruited the best Apple workers to come with him. Apple even sued him over it, claiming loss of company secrets.

 

[Moto G]

THIS! They make great products, are very profitable (even after paying staff millions of dollars) and have enough cash tucked away in case there is a rough patch.

But no, they're "failing" or "in trouble" because to create enough money per share to keep the shareholders happy would require an insane amount of new revenue from a new product.

"Patch"? Apple have enough dough to "see them through" a rough millenia

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Now we see the armchair lawyers out in full force


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[dysamoria]

How does this help the people who were unable to get hired by one company for being employed at another?

Oh yeah, it doesn't. This is the rich squabbling over how much more rich they might've been.