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.

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs General

Recruitment Genius: Senior Environmental Adviser - Maternity Cover

£37040 - £43600 per annum: Recruitment Genius: The UK's export credit agency a...

Recruitment Genius: CBM & Lubrication Technician

£25000 - £27500 per annum: Recruitment Genius: This company provides a compreh...

Recruitment Genius: Care Worker - Residential Emergency Service

£16800 - £19500 per annum: Recruitment Genius: Would you like to join an organ...

Recruitment Genius: Senior Landscaper

£25000 - £28000 per annum: Recruitment Genius: In the last five years this com...

Day In a Page

The long walk west: they fled war in Syria, only to get held up in Hungary – now hundreds of refugees have set off on foot for Austria

They fled war in Syria...

...only to get stuck and sidetracked in Hungary
From The Prisoner to Mad Men, elaborate title sequences are one of the keys to a great TV series

Title sequences: From The Prisoner to Mad Men

Elaborate title sequences are one of the keys to a great TV series. But why does the art form have such a chequered history?
Giorgio Armani Beauty's fabric-inspired foundations: Get back to basics this autumn

Giorgio Armani Beauty's foundations

Sumptuous fabrics meet luscious cosmetics for this elegant look
From stowaways to Operation Stack: Life in a transcontinental lorry cab

Life from the inside of a trucker's cab

From stowaways to Operation Stack, it's a challenging time to be a trucker heading to and from the Continent
Kelis interview: The songwriter and sauce-maker on cooking for Pharrell and crying over potatoes

Kelis interview

The singer and sauce-maker on cooking for Pharrell
Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea