Apple and Google Lose Bid for Trial Avoidance

Google, Apple and two other technology companies had made a bid for avoiding a trial in a class action lawsuit that had claimed that there was a scheme organized by the companies for driving down wages, but this request was rejected by a US judge. The companies have been sued by tech workers and they have alleged that the firms are conspiring to avoid competition amongst each other for employees, with the sole purpose of averting a war in terms of salary. The trial will be starting in May. The four companies that had made a request included Google, Apple, Adobe and Intel and they had demanded a judgment in their favor without the need of a trial.

The companies had argued that the companies had reached any no-hire agreements independently and had played no part in an overarching conspiracy. This argument was rejected by the US District Court Judge of San Jose, California, Lucy Koh. She said that the inference that these agreements were not made independently is bolstered by the fact that a few of intertwining high level executives had entered into them. No comment was made by Adobe’s spokesperson in this regard while an Intel spokesman said that the ruling was being studied by the company. No response was made by either Apple or Google.

The case had been initiated in 2012 by five software engineers that had sued Adobe, Intel, Apple and Google and had alleged a conspiracy of suppressing pay by making an agreement of not to recruit or hire each other’s workers. Accusations against the defendants included the violation of the Clayton Act and the Sherman Act antitrust laws as they conspired to eliminate competition for labor. This deprives the workers of hundreds of millions of dollars in terms of compensation and the ease of job mobility. In Silicon Valley, the case has been closely observed and most of it was built in emails between high-level executives including Eric Schmidt, the former Chief Executive Officer of Google and the late Chief Executive Officer of Apple, Steve Jobs.

In the order written by Koh, it was stated that even though the companies were competitors, they had chosen to share confidential information regarding compensation. For instance, Paul Otellini, the chief executive of Google had spread information about competitors’ bonus that he had found from Google. The judge said that only when true competition was squelched by anti-solicitation agreements, this confidential information could be shared safely between the competitors and this would be inferred by a reasonable jury.

Judge Lucy Koh also said that other companies had refused to enter into these agreements and a cease fire between Facebook and Google had been attempted by Bill Campbell, who is a member of the Apple board and also advises Google. Google’s entreaties had been refused by Sheryl Sandberg, the chief operating officer of Facebook, according to court documents. She said that these attempts showed that these agreements were part of a broader conspiracy and were not independent or isolated bilateral agreements.

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