US tech firms Apple, Google, Intel and Adobe have settled out of court following accusations that they conspired to keep their employees salaries lower.
The companies had recently been taken to court in the US over an alleged internal agreement not to poach employees from each other with better job offers.
The case, which is was submitted on behalf of a total of 64,000 employees shared between all four companies, was scheduled to start at the end of May. Faced with damages of between three and nine billion US dollars if they lost the court case, the tech giants chose to settle for a total sum of $324 million.
Although the companies admitted that certain no-hire deals had been made, they deny conspiring to maintain lower wages.
All four involved companies had previously settled a US Department of Justice investigation in 2010 with a formal agreement not to negotiate no-hire deals. The court case was largely based on emails between executives at the tech firms.
What were they up to?
- Google’s Eric Schmidt is reported to have emailed former Apple CEO Steve Jobs that Google was firing one of their recruiters for soliciting an Apple employee. Jobs is said to have forwarded this email with a smiley face to one his HR executives.
- As described by Google’s Sergey Brin, Jobs had personally told him “If you hire a single one of these people [Apple’s engineers] that means war”, SCMP reports.
- Reuters states that Schmidt requested that no-cold call agreements with other tech companies be discussed “verbally, since I don’t want to create a paper trail over which we can be sued later?”
- Meanwhile, Apple was struggling to fend off smartphone manufacturer Palm, which had been approaching its employees with job offers. Jobs threatened the company with a patent lawsuit if they refused to enter into a no-poaching agreement, which Palm executive Edward Colligan claimed was “likely illegal”.
- Not all tech giants were party to the HR conspiracy, and Facebook refused an offer from Google to enter into a deal to stop stealing each others employees, Reuters has also reported.
Feature image: NEW YORK – JULY 21: Apple store on Fifth Avenue on July 21 2012 in New York City, USA. The store in it self is all underground except for the 32-foot glass cube right in front of f the GM building via Shutterstock / copyright: Andrey Bayda