Google, Apple, Abobe and Intel to pay £324m in wage-fixing lawsuit

Four of the world’s largest tech companies have agreed an 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.

Companies Apple, Google, Intel and Adobe agreed to pay out £324million 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 partaking 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 deceased former CEO of Apple, Steve Jobs.

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 this 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 $3 million, and this could have tripled to almost $9 million under US anti-trust laws.

The portion of the $324 million 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 £15.4 billion. While Apple supplemented with a high level of iPad and iPhone 5 sales, has seen their profits rise to £10.6 billion.

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
  • 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

Recruitment Genius: Junior Web Designer - Client Liaison

£6 per hour: Recruitment Genius: This is an exciting opportunity to join a gro...

Recruitment Genius: Service Delivery Manager

Negotiable: Recruitment Genius: A Service Delivery Manager is required to join...

Recruitment Genius: Massage Therapist / Sports Therapist

£12000 - £24000 per annum: Recruitment Genius: A opportunity has arisen for a ...

Ashdown Group: Practice Accountant - Bournemouth - £38,000

£32000 - £38000 per annum: Ashdown Group: A successful accountancy practice in...

Day In a Page

The Last Word: Justin Gatlin knows the price of everything, the value of nothing

Michael Calvin's Last Word

Justin Gatlin knows the price of everything, the value of nothing
The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower