Steve Jobs’ penchant for total control over Apple may have come back to bite him posthumously. Apple, Google, Intel, Intuit and Adobe recently agreed to settle a class action suit filed by more than 64,000 employees alleging that the tech giants colluded to engage in a non-poaching agreement designed to hold salaries to a less competitive level. Embarrassing e-mails between Jobs and Google Chairman Eric Schmidt, which threatened to show the tech titans in a less than flattering light, may have hastened the companies’ decision to agree to the $324 million settlement.
One of the conversations cited in the court’s ruling was between Jobs and Google co-founder Sergey Brin, in which Jobs threatened, “If you hire a single one of these people, that means war.” (Rosenblatt) The employees suffering from enforcement of this collusion were engineers, programmers, animators, digital artists and other technical professionals. Other incriminating e-mails between Apple, Intel, Google, Intuit and Adobe were cited as proof of complicity between the companies.
The violations, which were alleged to have occurred between 2005 and 2009 were an attempt to limit competition and suppress pay and other compensation. The companies had previously settled antitrust claims with the U.S. Justice Department which resulted in an agreement not to engage in such practices in the future. There is still a case pending against Ebay for similar practices. The Justice Department claims, however, do not involve employee plaintiffs or the threat of monetary damages to be paid on behalf of those employees.
The tech companies have not admitted to wrongdoing or the existence of such no-hire agreements and have claimed they had no intention to prevent wage increases to employees. However, e-mails between top executives of Google and Apple had begun to be made public and alluded to an unspoken agreement between the tech giants to engage in this conduct. It is thought that the companies were averse to having their dirty linen (private e-mails) aired in pubic and agreed to the settlement to avoid such exposure.
Three other companies named in the original complaint were Intuit, Disney’s Pixar and LucasFilm; they previously agreed to a settlement of approximately $20 million. This settlement affects only 8% of the class in the lawsuit. Apparently, they saw the handwriting on the computer screen long before Apple, et al., preferring not to have their motives examined too closely or their in-house computer correspondence divulged.
Of course a $324 million settlement divided 64,000 ways amounts to little more than an insult to the employees of these tech conglomerates that realize profits of billions of dollars. Workers in the class action were seeking $3 billion in damages, and if they had prevailed, there could well have been triple the damages under the federal antitrust law. As it is, the $324 million settlement “amounts to 0.4 percent of the combined total revenue earned by the four companies in each’s most recent quarter.” (Rosenblatt) The recovery, per plaintiff, amounts to little more than a small slap on the wrist of the Apple executives who hold the fates of thousands of employees in their hands. Considering the amount of lost wages these employees may have sustained, it makes you wonder who took a bite out of whom.
Levine, Dan, “Apple, Google Agree to Settle Antitrust Lawsuit over Hiring Deals,” Reuters, Apr. 24, 2014
Rosenblatt, Joel, “Apple, Google, Intel, Adobe Settle Antitrust Hiring Case,” Bloomberg, Apr. 25, 2014
Fitzgerald, Seth, “Tech Giants Settle Worker Antitrust Lawsuit,” Newsfactor, Apr. 25, 2014
Mintz, Howard, “Apple, Google, Intel Likely Conspired to Not Poach Workers, Judge Says,” Mercury News, Apr. 5, 2013