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
ebooksA special investigation by Andy McSmith
  • Get to the point
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

Ashdown Group: Front-End UI Application Developer

£30000 - £40000 per annum + Benefits: Ashdown Group: Front-End UI Application ...

Recruitment Genius: Digital Account Executive

£18000 - £26000 per annum: Recruitment Genius: They work with major vehicle ma...

Recruitment Genius: Service Engineers - Doncaster / Hull

£27000 per annum: Recruitment Genius: Domestic Service Only Engineers are requ...

Recruitment Genius: Employability / Recruitment Adviser

£23600 - £27500 per annum: Recruitment Genius: The Employability Service withi...

Day In a Page

Where the spooks get their coffee fix: The busiest Starbucks in the US is also the most secretive

The secret CIA Starbucks

The coffee shop is deep inside the agency's forested Virginia compound
Revealed: How the Establishment closed ranks over fallout from Loch Ness Monster 'sighting'

How the Establishment closed ranks over fallout from Nessie 'sighting'

The Natural History Museum's chief scientist was dismissed for declaring he had found the monster
One million Britons using food banks, according to Trussell Trust

One million Britons using food banks

Huge surge in number of families dependent on emergency food aid
Excavation at Italian cafe to fix rising damp unearths 2,500 years of history in 3,000 amazing objects

2,500 years of history in 3,000 amazing objects

Excavation at Italian cafe to fix rising damp unearths trove
The Hubble Space Telescope's amazing journey, 25 years on

The Hubble Space Telescope's amazing journey 25 years on

The space telescope was seen as a costly flop on its first release
Did Conservative peer Lord Ashcroft quit the House of Lords to become a non-dom?

Did Lord Ashcroft quit the House of Lords to become a non-dom?

A document seen by The Independent shows that a week after he resigned from the Lords he sold 350,000 shares in an American company - netting him $11.2m
Apple's ethnic emojis are being used to make racist comments on social media

Ethnic emojis used in racist comments

They were intended to promote harmony, but have achieved the opposite
Sir Kenneth Branagh interview: 'My bones are in the theatre'

Sir Kenneth Branagh: 'My bones are in the theatre'

The actor-turned-director’s new company will stage five plays from October – including works by Shakespeare and John Osborne
The sloth is now the face (and furry body) of three big advertising campaigns

The sloth is the face of three ad campaigns

Priya Elan discovers why slow and sleepy wins the race for brands in need of a new image
How to run a restaurant: As two newbies discovered, there's more to it than good food

How to run a restaurant

As two newbies discovered, there's more to it than good food
Record Store Day: Remembering an era when buying and selling discs were labours of love

Record Store Day: The vinyl countdown

For Lois Pryce, working in a record shop was a dream job - until the bean counters ruined it
Usher, Mary J Blige and Will.i.am to give free concert as part of the Global Poverty Project

Mary J Blige and Will.i.am to give free concert

The concert in Washington is part of the Global Citizen project, which aims to encourage young people to donate to charity
10 best tote bags

Accessorise with a stylish shopper this spring: 10 best tote bags

We find carriers with room for all your essentials (and a bit more)
Paul Scholes column: I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England

Paul Scholes column

I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England
Jessica Ennis-Hill: 'I just want to give it my best shot'

Jessica Ennis-Hill: 'I just want to give it my best shot'

The heptathlete has gone from the toast of the nation to being a sleep-deprived mum - but she’s ready to compete again. She just doesn't know how well she'll do...