Poached Apple Lawsuit Settled

California Employment Law Letter

Matthew A. Goodin, a Senior Attorney in the Labor and Employment practice, based in the San Francisco office, wrote an article titled "Poached Apple Lawsuit Settled."

Following is an excerpt:

In a December 10, 2012, article, we discussed a lawsuit filed in November 2012 by the U.S. Department of Justice (DOJ) against eBay, the online auction company, accusing it of entering into an agreement with Intuit in which both companies agreed not to recruit or hire each other's employees (see "Federal government sues eBay for alledged antipoaching agreement on pg. 1). The state of California filed a similar suit alleging violations of state laws.

Our 2012 article also mentioned that in 2010, the DOJ filed suit against Adobe Systems, Apple, Google, Intel, Intuit, and Pixar over various agreements not to solicit each other's employees. All six companies entered into a settlement with the DOJ prohibiting them from engaging in such practices, but they paid no financial penalties.

Undoubtedly spurred to action by the DOJ case, plaintiffs' attorneys filed a civil class action alleging antitrust violations in September 2011 on behalf of some 64,000 employees against Adobe, Apple, Google, Intel, Intuit, Lucasfilm, and Pixar. Specifically, the lawsuit alleged that by entering into so-called antipoaching agreements, executives at those powerful Silicon Valley companies conspired to drive down salaries.

According to the complaint, senior executives at the companies agreed not to recruit each other's employees and to notify each other when making an offer to another company's employee. They also agreed that if one of them offered a job to another company's employee, no other company would make a higher counteroffer to that employee. The complaint included reference to the DOJs finding that the companies' agreements violated federal antitrust law. The plaintiffs sought damages of up to $3 billion, which could have been tripled under antitrust law provisions.