Apple, Google settle workers' lawsuit alleging hiring conspiracy

Four major tech companies including Apple and Google have agreed to settle a lawsuit brought by workers who accused the firms of conspiring to hold down salaries in Silicon Valley.

The settlement, disclosed in a court filing on Thursday, did not spell out terms. It comes just weeks before a high-profile trial had been scheduled to begin.

Tech workers filed a class action lawsuit against Apple, Google, Intel and Adobe Systems in 2011, alleging they conspired to refrain from poaching one another's employees in order to avert a salary war. A trial had been scheduled to begin at the end of May on behalf of roughly 60,000 workers in the class action suit.

The case, closely watched in Silicon Valley, was largely built on emails among top executives, including late Apple Chief Executive Steve Jobs and former Google CEO Eric Schmidt, who agreed not to approach each other's employees with job offers.

For instance, after a Google recruiter solicited an Apple employee, Schmidt told Jobs that the recruiter would be fired, court documents show. Jobs then forwarded Schmidt's note to a top Apple human resources executive with a smiley face.

The companies had acknowledged entering into some no-hire agreements but disputed the allegation that they had conspired to drive down wages.

Spokespeople for Apple and Google declined to comment, and representatives for the other companies were not immediately available for comment. An attorney for the plaintiffs, Kelly Dermody of Lieff Cabraser Heimann & Bernstein, in a statement called the deal “an excellent resolution.”

Apple, Google, Adobe and Intel in 2010 settled a U.S. Department of Justice probe by agreeing not to enter into such no-hire deals in the future. The four companies had since been fighting the civil antitrust class action.

Walt Disney's Pixar and Lucasfilm units and Intuit had already agreed to a settlement, with Disney paying about $9 million and Intuit paying $11 million.

Had the case against Apple, Google, Intel and Adobe gone to trial, plaintiffs would have asked a jury to award roughly $3 billion in damages, according to court filings. Under antitrust law, that could have then been tripled to $9 billion.

Any settlement must be approved by U.S. District Judge Lucy Koh in San Jose, California.

Koh is also the same judge overseeing the highly contentious and ongoing legal war between Apple and Samsung.

Corporate defendants in antitrust cases often agree among themselves what portion each will contribute towards a settlement, said Daniel Crane, a professor at the University of Michigan Law School.

The plaintiffs and the companies will disclose principal terms of the settlement by May 27, according to the court filing on Thursday, though it is unclear whether that will spell out what each company will pay.

Some Silicon Valley companies refused to enter into no-hire agreements. Facebook Chief Operating Officer Sheryl Sandberg, for instance, rebuffed an entreaty from Google in 2008 that they refrain from poaching each other's employees.

Additionally, Apple's Jobs threatened Palm with a patent lawsuit if Palm didn't agree to stop soliciting Apple employees. However, Palm’s then-Chief Executive Edward Colligan told Jobs that the plan was "likely illegal," and that Palm was not "intimidated" by the threat.

Court filings detailed how Google developed its no-hire agreements. When Google's human resources director asked then-chief executive Schmidt about sharing its no-cold call agreements with competitors, Schmidt — now the company's executive chairman — advised discretion.

"Schmidt responded that he preferred it be shared 'verbally, since I don't want to create a paper trail over which we can be sued later'" he said, according to the court filing. The HR director agreed.

Al Jazeera and Reuters