Civil Suit Against Google, Apple and Others Over Employee-Poaching Ban Can Continue

A U.S. District Judge has ruled that an anti-trust case filed against a number of tech companies can continue, saying "they still have an antitrust claim" according to Bloomberg.

usdc

[Judge] Koh didn’t take issue with the allegations about the agreements between individual companies, Joseph Saveri, a lawyer for the plaintiffs, said in an interview after the hearing. Instead, Koh has questions about “how it ties together,” or claims of an over-arching conspiracy between all the companies, he said.

The case goes back more than 5 years, according to the lawsuit, which alleges that "no solicitation" agreements appeared in 2005 between Apple, Adobe, Google, Intel, Intuit, Lucasfilm, and Pixar. The agreements prevented companies from contacting employees at other companies who were party to the agreement, though employees were free to apply for jobs at other institutions.

The agreements were investigated in 2010 by the Justice Department. The claims were eventually settled, with the companies agreeing not to form no-solicitation agreements for five years.

The current lawsuit is a class-action civil suit brought by employees who said they were harmed by the anti-competitive actions of the defendant companies.

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Top Rated Comments

Krazy Bill Avatar
162 months ago
Waaaaaahhhh! I can't break the contract that I signed!
Sure you can. But the other companies can't hire you. :)

Silly agreement. Anything that fosters cooperation between competitors means consumers lose. (And in this case, workers).
Score: 8 Votes (Like | Disagree)
PeterQVenkman Avatar
162 months ago
Waaaaaahhhh! I can't break the contract that I signed!
Nope, you missed the entire meaning of it. It's about making it impossible for talented people to get hired elsewhere, or to keep them from making more money in their field of expertise as they become more talented and experienced.

A business lawyer, Barry Barnett, says it better than I could:

How can you hold down the cost of hiring the best talent?

In lots of businesses, the skill, knowledge, and creativity of workers make a crucial difference. Those traits matter most on the high end of the high-end. Think law, medicine, engineering, physics, computer science, rocket science, oenology, epistemology, and macrame. The high-end could hardly exist without these titans.

So what can you do to manage what you have to pay for their services? Can you agree with firms that compete with you to limit the talent's compensation? Can you exchange promises not to solicit one another's employees? Can you, in short, conspire to restrain trade?

Of course not.

That explains why Lucasfilm reached a deal with the Antitrust Division of the U.S. Department of Justice to end the company's pact with Pixar not to compete for digital animators. In a Complaint it filed as part of the arrangement with Lucasfilm, the Antitrust Division charged that Lucasfilm and Pixar "entered into an agreement not to cold call, not to make courteroffers under certain circumstances, and to provide notification when making employment offers to each other's employees."

Complaint #2: The Lucasfilm-Pixar pact, according to the press release, "eliminated important forms of competition to attract highly skilled employees and, overall, significantly diminished competition to the detriment of affected employees who were likely deprived of information and access to better job opportunities."

Pixar -- along with other high-tech companies including Intel and Apple -- reached a similar deal with the DOJ in September. Post here (http://blawgletter.typepad.com/bbarnett/2010/09/doj-pact-to-stop-high-tech-hiring-hiatus.html).

Note that an agreement with a direct competitor to limit rivalry over hiring employees constitues a per se violation of the Sherman Act. A per se violation doesn't require proof of monopoly power. So you may not want to beguile yourself with the notion that you comply with antitrust law so long as you don't dominate your market.
http://blawgletter.typepad.com/bbarnett/2010/12/animating-competition-doj-settles-claim-against-lucasfilm-for-noncompete-deal-with-pixar.html
Score: 7 Votes (Like | Disagree)
Rodimus Prime Avatar
162 months ago
Waaaaaahhhh! I can't break the contract that I signed!

Problem is the contract was illegal and not like you were given a choice. The boilerplate contracts have many things that are abuse of power.

If you want a job you have to sign that contract like that. So you have 2 choices. Be unemployed or sign a contract like that. There are no other choices.
Score: 7 Votes (Like | Disagree)
samcraig Avatar
162 months ago
Waaaaaahhhh! I can't break the contract that I signed!

What in the world are you talking about?
Score: 6 Votes (Like | Disagree)
AJH1993 Avatar
162 months ago
At least it's not another patent lawsuit... right?
Score: 6 Votes (Like | Disagree)
blewyn Avatar
162 months ago
I can understand to a degree why these companies do this sort of thing. If there were no agreement the tech world would have more technological espionage than it already has.

Google poaches an employee from Apple just to get information. Etc.

There has to be some kind of rule.

There is. It's called competition. You pay your employees enough to keep them from going to the competition. The free market cuts both ways.
Score: 4 Votes (Like | Disagree)