Google and Apple amongst companies to pay £324 million in court settlement after being accused of keeping down wages

Four of the world’s largest tech companies have agreed a multimillion out-of-court settlement with a group of employees that claimed they had organised an employment agreement that would control worker movement and keep the salaries of Silicon Valley’s workers down.

Apple, Google, Intel and Adobe agreed to pay out £324m to the group and avoid lawsuit proceedings that were due to begin next month.

The class action case was brought against the tech giants on behalf of almost 64,000 workers in 2011, after they alleged that all four companies had conspired to organise employment arrangements that would prevent companies from poaching each other’s workers.

It was felt that by taking part in the arrangement companies were restricting the ability for workers to move between companies and as a result reduce the employer competition.

It was argued that by limiting this competition, the four named tech companies could control wages and, as a consequence, keep them low.

Amongst the bosses to be allegedly involved in these agreements was former CEO of Apple, Steve Jobs, who died in October 2011.

A set of email exchanges that were to be used as evidence to support the lawsuit are reported to show Jobs and former Google chief executive Eric Schmidt agreeing to fire a Google recruiter after he was identified as being responsible for soliciting an Apple employee for Google.

In the exchange Schmidt is seen telling Jobs that the recruiter will be fired as a result of his actions, to which Jobs replied with a smiley face.

Other examples put forward by the team filing the lawsuit, reportedly show Schmidt advising discretion when it came to sharing the company’s no-cold call agreements with competitors.

According to a court filing, Schmidt told a Google human resource manager that he preferred the agreement to be shared verbally, as he “didn’t want to create a paper trail over which we can be sued later?'"

For the four companies involved, the settlement represents just a fraction of the money that they could have had to pay out if the court proceedings went ahead and they lost.

The lawsuit from the employees demanded $3m, and this could have tripled to almost $9m under US anti-trust laws.

The portion of the $324m that each of the companies will have to pay will be a drop in the ocean when compared to the profits each company records on a yearly basis.

In the first quarter of 2014, Google has already recorded profits of £15.4bn. While Apple supplemented with a high level of iPad and iPhone 5 sales, has seen their profits rise to £10.6bn.

While the companies agree that some employment arrangements were made, they say that these were never with the intention of keeping wages down.

Both Intel and Adobe, who were also accused of being part of the agreements, said that they denied any wrongdoing.

Adobe said in a statement: "We firmly believe that our recruiting policies have in no way diminished competition for talent in the marketplaces.''

While, Chuck Mulloy, spokesman for Intel, said the firm chose to settle "to avoid the risks, burdens and uncertainties of ongoing litigation.''

Google and Apple declined to comment.

This isn’t the first time that Google and Apple have been embroiled in a case of in which they have tried to manufacture employment agreements with other Silicon Valley companies.

In 2008, Facebook, who are against employment agreements, rebuffed Google’s offer of entering an employment agreement after Facebook had solicited a number of Google programmers.

This was followed by a threat from Apple’s Jobs to take out a patent lawsuit against Smart manufacturers Palm if they did not agree to stop poaching Apple employees.

News
peopleFrankie Boyle responds to referendum result in characteristically offensive style
Sport
Lewis Hamilton will start the Singapore Grand Prix from pole, with Nico Rosberg second and Daniel Ricciardo third
F1... for floodlit Singapore Grand Prix
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Sport
Gabriel Agbonlahor, Alexis Sanchez, Alan Pardew and Graziano Pelle
footballAfter QPR draw, follow Villa vs Arsenal, Newcastle vs Hull and Swansea vs Southampton
New Articles
i100... she's just started school
News
news
New Articles
i100
Life and Style
Couples have been having sex less in 2014, according to a new survey
life
Arts and Entertainment
musicBiographer Hunter Davies has collected nearly a hundred original manuscripts
New Articles
i100... despite rising prices
Voices
Holly's review of Peterborough's Pizza Express quickly went viral on social media
voices
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Cover Supervisor

£75 - £90 per day + negotiable: Randstad Education Group: Are you a cover supe...

Marketing Manager - Leicestershire - £35,000

£30000 - £35000 per annum: Ashdown Group: Marketing Manager (CIM, B2B, MS Offi...

Marketing Executive (B2B and B2C) - Rugby, Warwickshire

£22000 - £25000 per annum: Ashdown Group: A highly successful organisation wit...

SEN Coordinator + Teacher (SENCO)

£1 per day: Randstad Education Leeds: Job Purpose To work closely with the he...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam