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Settlement Reached in High-Tech Workers' Poaching Suit

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Steve Jobs introduces the second-generation iPad in March 2011 at the Moscone Center in San Francisco. (Kimihiro Hoshino/KQED)
Steve Jobs introduces the second-generation iPad in March 2011 at the Moscone Center in San Francisco. (Kimihiro Hoshino/Getty Images)

By Associated Press and KQED

Google, Apple, Intel and Adobe have settled a class-action lawsuit alleging they conspired to prevent their engineers and highly sought technology workers from getting better job offers from one another.

The agreement announced Thursday averts a Silicon Valley trial that threatened to expose the tactics that billionaire executives such as late Apple Inc. CEO Steve Jobs and former Google CEO Eric Schmidt deployed to corral lower-paid employees working on a variety of products and online services.

The trial had been scheduled to begin May 27 in San Jose.

Terms of the settlement aren't being revealed yet. An attorney representing the workers in the case says the details will be filed in court by May 27.

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The suit was seeking $3 billion in damages on behalf of 64,600 workers.

Howard Mintz of the San Jose Mercury News reported that "the case already has blown the lid off on the way the Valley's most powerful executives dealt with the region's hypercompetitive job market."

(It revealed) internal emails with damaging remarks about suppressing recruitment between 2005 and 2009. In one such 2005 email exchange, Jobs reportedly told Google co-founder Sergey Brin: "If you hire a single one of these people, that means war."

Recently released documents show that one Valley power, Facebook, rebuffed pressure to take part in the no-poaching agreements. Koh in a recent ruling noted how Facebook refused to take part in "Google's anti-solicitation agreements."

The judge has repeatedly found there was ample evidence of anti-competitive conduct for the case to proceed to trial. Pixar and Lucasfilm, as well as Intuit, previously settled in the case for about $20 million.

The Merc story noted that Kelly Dermody, a lawyer for the workers, declined to discuss specifics or whether the settlement would likely affect Valley hiring practices.

According to AppleInsider, it was suggested earlier this month that Apple and others could pay a "blindingly high" $9 billion to settle the lawsuit, because of a "mountain of evidence" that seemed to implicate the companies for participating in an alleged no-hire cartel.

AppleInsider also wrote:

The employees involved in the suit were seeking a payment of about $90,000 per person — a considerable sum that they apparently felt confident about because of the strong evidence presented in the case. Some of the key evidence involved late Apple co-founder Steve Jobs, who placed a call to Google's Sergey Brin and threatened "war" over recruitment efforts from the rival company.

Jobs also made similar requests of other top company execs like Edward Colligan, former CEO of erstwhile handset maker Palm, who refused to enter any such agreement, saying that it was "likely illegal." Apple was also revealed to have sent out an email identifying that Google employees were part of a "hands-off" list.

The U.S. Department of Justice leveled its own lawsuit regarding the matter after investigating Apple, Adobe, Google, Intel, Intuit and Pixar for the same anti-poaching measures. Like in this class-action suit, the defendants ultimately settled that case with the DOJ in 2010.

Mac Rumors noted that no-solicitation agreements dated back to 2005 and — in addition to Apple, Google, Intel, and Adobe — involved Intuit, Lucasfilm and Pixar, among others.

According to a background piece done by PandoDaily in January:

The secret wage-theft agreements between Apple, Google, Intel, Adobe, Intuit and Pixar (now owned by Disney) are described in court papers obtained by PandoDaily as “an overarching conspiracy” in violation of the Sherman Antitrust Act and the Clayton Antitrust Act, and at times it reads like something lifted straight out of the robber baron era that produced those laws. Today’s inequality crisis is America’s worst on record since statistics were first recorded a hundred years ago — the only comparison would be to the era of the railroad tycoons in the late 19th century.

In another post on March 22, PandoDaily detailed how the arrangements among companies worked and maintained that the conspiracy extended beyond Silicon Valley.

A New York Times piece four days ago predicted a settlement:

The companies certainly have good reasons to make the case disappear. They do not want to open themselves up to weeks of damaging testimony replete with emails and other evidence the plaintiffs plan to present, many of which have already been made public and been chewed over by the press.

Then there is the uncertain calculus of a potential jury’s makeup at a moment when Silicon Valley companies are regarded with increasing distrust by some of the people who live there.

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