Tech Titans Pay Out Just $300 Mil for Giant Wage-Fixing Conspiracy

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Sam Biddle

04/25/14 08:49AM

Filed to: apple

After a protracted legal battle, Reuters reports Apple, Google, Intel, and Adobe will settle a lawsuit claiming they conspired to pay their employees far less than they deserved. These companies got a very good deal.

The suit, which represented over 60,000 tech workers over many years of potential wage losses, alleges that top tech executives—including Steve Jobs and Eric Schmidt—agreed to leave employees alone at rival companies in order to artificially deflate competitive hiring offers. Vanity Fair explains:

A non-poaching agreement hurts employees by preventing them from seeking the best jobs at the available highest wages. By conspiring together, Apple, Google, Adobe, and Intel, clearly among the biggest tech firms in the country, would have reduced the need to counter competitive offers or aggressively compensate employees to keep them happy.

Aggressive compensation was something these same execs never had to worry about. Reuters India notes the $324 million payout is significantly less than the roughly nine billion dollar damages these companies could've been subject to had the suit gone to trial. It's also only around $100 million or so more than the chief executives of those companies make in a single year.

Photo: Shutterstock

The following replies are approved. To see additional replies that are pending approval, click Show Pending. Warning: These may contain graphic material.

5

lena dunhams boobs Sam Biddle 04/25/14 09:03AM

claiming they conspired to pay their employees far less than they deserved. These companies got a very good deal.

Sam you know very well that was not the case. It was because they were poaching big players at the companies left and right that they made this deal. They didnt give two shits about most of the employees who sued and it was clear in the emails disclosed they didnt. It was pulling bigger players which damaged product timelines that caused the agreement. And Google was the one who started the whole shitstorm by poaching employees from Apple and Microsoft.

And it was also very clear the whole thing never was going to trial. There wasnt enough evidence to convict of any wrong doing or of this vast conspiracy. It was from the start a money grab by greedy lawyers who knew they couldnt win but got them to agree to enough money to buy that Yacht they always wanted...

28

Raineyb1013 lena dunhams boobs 04/25/14 09:07AM

And this mitigates the illegal collusion how?

5

benjaminallover lena dunhams boobs 04/25/14 09:08AM

Sure, and then when they realized that the deal was suppressing compensation, saving them money, and technically constituted wage fixing, they ended the agreement right away because that's not fair for all the little guys! Oh wait...

1

lena dunhams boobs Raineyb1013 04/25/14 09:09AM

You have to prove it was illegal. That the prosecutions lawyers settled for such little money proves that they themselves knew it wasnt illegal and they would never have won.

GregorMendel lena dunhams boobs 04/25/14 09:11AM

Interesting. Though that is a legally insane approach which explains the settlement.

2

thismessagewillselfdestruct Sam Biddle 04/25/14 10:14AM

legitimate question

who gets that money? I think that's the story here.

1

raitchison thismessagewillselfdestruct 04/25/14 10:28AM

Lawyers of course get by far the largest share of it.

1

Zeejay thismessagewillselfdestruct 04/25/14 11:55AM

Yes! Exactly. Usually it ends up being contributed to not-for-profits that are conveniently these tech companies' lobbying partners, undermining anything punitive about these settlements and fines. Hope Sam keeps a fire on that.

JohannesClimacus thismessagewillselfdestruct 04/25/14 04:54PM

Members of the settlement class will get the money. The plaintiffs' lawyers will likely get 10-20% for a case this size. Any money left over usually gets donated to a charity proposed by the plaintiffs attorneys and approved by the court.

4

Borromeo Sam Biddle 04/25/14 09:24AM

The loser geeks rule the world now. A totalitarian digital utopia run by power hungry, vengeful, socially awkward nerds that think they know what everyone needs. Fuck them.

The next tech bubble can't burst soon enough.

bangishotyou Borromeo 04/25/14 12:36PM

You know when you refer to people as "loser geeks" and "power hungry, vengeful, socially awkward nerds" you pretty much say "my opinion is irrelevant and I'm stereotyping and generalizing large groups of people based on a handful of examples of bad behavior from a minority sampling of said people", right?

Because you are.

And really, if you seem to have as big an issue with those kinds of people as you very clearly do, I really hope you aren't using any products made by those "loser geeks" and "socially awkward nerds". Because you're giving them money to be "power hungry" and "vengeful". You're fueling their "tyranny".

Borromeo bangishotyou 04/25/14 01:04PM

Shove it. I could give a shit. Steve Jobs, Mark Zuckerberg and any of those other "genius" asshats are loser assholes. Vengeful loser assholes. Just as bad as the WASPy pricks that said cigarettes were good for you in the 1960s. They've ruined the world.

bangishotyou Borromeo 04/25/14 01:14PM

"Shove it."

Ha, par for the course from what I expect to hear from the typical ValleyWag commenter.

Thank you for your insightful and well put rebuttal. /s

Loser assholes? I think someone is venting and resentful of the fact that while they're commenting on a website using technology built by someone just like those "loser assholes" they actually do not have the money or intelligence of anyone of that type. Is that it? Are you mad cause you don't make what they do or have the wits to do what they do? No shame in it and we all can't luck out in the talent or finances departments of life.

I doubt they've ruined the world though. Again, per my previous remark, if they and what they've brought to the world are as bad as you claim it to be, feel free to stop replying on this website on the internet using your mobile device or computer. You know, cause you're only empowering them to ruin the world. But my money is on you won't do that.

You're an internet tough guy and keyboard warrior. You talk a shitty game and you won't put your money where your mouth is. When you're ready to get off the internet, smash your computer and stop using a vehicle of any kind and doing things the old fashioned way by hand or foot, you can do with your two cents exactly what you said as your opening reply to me. "Shove it."

Borromeo bangishotyou 04/25/14 01:19PM

Oh, he who protects tech billionaires from abusive Gawker comments. Keep on sucking balls and ass and maybe one day you'll find yourself on top of the world looking down at all of us little folk that didn't have the brains to create Kinja.

gramercypolice Sam Biddle 04/25/14 09:40AM

Note that Intuit and Disney settled earlier for a combined total of $9 million, so if they used that as a yardstick, then maybe this settlement makes sense as a matter of extrapolation. But that settlement, and this new one both still have to be approved by the judge, and it's still possible that she will say the settlements don't fit the damages suggested by the evidence she's seen.

It's interesting if you read through the documents in evidence. Google's emails anyway seem to indicate a left-hand/right-hand approach, which involves keeping Jobs and Whitman and other execs calm on the one hand while still recruiting employees on the other. Note that the Google emails highlight which companies they can and can't recruit from, and use different types of recruiting as 'okay' or 'not okay'. So, for example, for Apple and a few others, Google wouldn't recruit managers and above for any reason. They would recruit other types of employees if they approached Google first or if a Google employee identified a colleague who was likely to want to work at Google. So, a personal reference recruitment was okay. But their email says there are no restrictions at all on recruiting / poaching engineering staff. So, I'm not saying my reading is exhaustive or authoritative, but if you exclude all the engineers from the lawsuit, your number of affected employees probably drops quite a bit.

At one point, Google was trying to recruit a healthy portion of the Safari browser team from Apple (2005) and Jobs called Brin to verbally murder him, and Brin says he told Jobs that he doesn't think that's true because (haha) Google wasn't building a browser. Then Brin tells HR it's okay to finalize the hiring of one of the Safari engineers, because he approached them and was probably going to Mozilla anyway if they didn't hire him. But the others on the team he indicates they should not pursue because he doesn't think they should poach entire teams.

There's a lot more to it than I'm laying out here. But it's a lot more nuanced, as well. I am no fan of Google's executives, or Meg Whitman, or Steve Ballmer. And Steve Jobs is dead. But the arrangement among the companies, while probably illegal and certainly morally dubious, doesn't seem quite as black and white as a lot of the news stories have made it sound.