Apple, Others Settle Anti-Poaching Lawsuit Before Trial

Source: Thinkstock

Source: Thinkstock

Apple (NASDAQ:AAPL) and three other prominent tech companies have decided to settle a class action lawsuit filed by former employees, reports Reuters. The case originated in 2011 when five software engineers accused the companies of conspiring to limit employees’ wages by agreeing not to poach workers from each other. The case was later granted class action status when the plaintiffs demonstrated that their lawsuits had enough in common to allow them to sue together. The lawsuit accused Apple, Google (NASDAQ:GOOG) (NASDAQ:GOOGL), Adobe (NASDAQ:ADBE), and Intel (NASDAQ:INTC) of participating in the conspiracy.

The lawsuit, which involved approximately 60,000 workers, was scheduled to proceed to trial in May. The four accused companies recently lost its bid to avoid a trial after U.S. District Judge Lucy Koh dismissed its requests for a summary judgment without trial.

The out-of-court settlement comes as no surprise to many observers who noted that the plaintiffs appeared to have an airtight case with plenty of evidence to back up their allegations of illegal no-hire agreements between multiple tech companies. In her order denying the defendants’ motions for summary judgment last month, Judge Koh noted the various emails and internal company memos that indicated the tech companies were conspiring with each other, including communications written by former Apple CEO Steve Jobs and Google co-founder Sergey Brin. According to court documents, Brin described one occasion when Jobs threatened Google with “war” if the company hired some former Apple employees.

On another occasion, former Google CEO Eric Schmidt fired a recruiter who solicited an Apple employee after Jobs complained, reports Reuters. Although the companies admitted that it made various no-hire agreements with each other, both continue to deny that it was a conspiracy to limit employees’ salaries.

The claims made by the employees in this lawsuit are similar to the ones made in a 2010 U.S. Department of Justice probe of seven tech companies’ hiring practices. The Justice Department probe ended after the companies agreed to stop its anticompetitive employment practices.

Although Intuit (NASDAQ:INTU) and Disney’s (NYSE:DIS) Lucasfilm and Pixar units were also originally alleged to be part of the conspiracy, both agreed to out-of-court settlements with its employees without going to trial. However, until today, Apple, Google, Adobe, and Intel were continuing to fight the allegations of antitrust violations. According to Reuters, Disney and Intuit settled its lawsuits with payments totaling $9 million and $11 million, respectively.

Although the terms of the most recent settlement agreement are unknown, Reuters noted that employees could have been eligible for up to $9 billion in damages under antitrust law. The terms of the settlement will be revealed on May 27, according to court documents seen by Reuters. However, it is unknown if the individual payments contributed by each company will be revealed or just the combined sum.

Follow Nathanael on Twitter (@ArnoldEtan_WSCS)

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