Apple Inc, Google agree to pay over $300 million to settle conspiracy lawsuit

Apr 25 2014, 10:32 IST
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Had they lost the trial, Google Inc, Apple Inc, Intel and Adobe Systems would have faced the prospect of paying as much as $9 billion. Had they lost the trial, Google Inc, Apple Inc, Intel and Adobe Systems would have faced the prospect of paying as much as $9 billion.
SummaryAgreement averts a trial that threatened to expose tactics deployed by Steve Jobs, Eric Schmidt.

Four major tech companies including Apple and Google have agreed to pay a total of $324 million to settle a lawsuit accusing them of conspiring to hold down salaries in Silicon Valley, sources familiar with the deal said, just weeks before a high profile trial had been scheduled to begin.

The settlement was disclosed in a court filing earlier on Thursday, which did not spell out terms.

Tech workers filed a class action lawsuit against Apple Inc, Google Inc, Intel Inc and Adobe Systems Inc in 2011, alleging they conspired to refrain from soliciting one another's employees in order to avert a salary war.

Trial had been scheduled to begin at the end of May on behalf of roughly 64,000 workers. Had the case gone to trial, plaintiffs would have asked a jury to award roughly $3 billion in damages, according to court filings. Under antitrust law, that could have then been tripled to $9 billion.

The case has been closely watched due to the potentially high damages award and a steady disclosure of emails in which Apple's late co-founder Steve Jobs, former Google CEO Eric Schmidt and some of their Silicon Valley rivals hatched plans to avoid poaching each other's prized engineers.

In one email exchange after a Google recruiter solicited an Apple employee, Schmidt told Jobs that the recruiter would be fired, court documents show. Jobs then forwarded Schmidt's note to a top Apple human resources executive with a smiley face.

Another exchange shows Google's human resources director asking Schmidt about sharing its no-cold call agreements with competitors. Schmidt, now the company's executive chairman, advised discretion.

"Schmidt responded that he preferred it be shared 'verbally, since I don't want to create a paper trail over which we can be sued later?'" he said, according to a court filing. The HR director agreed.

The companies had acknowledged entering into some no-hire agreements but disputed the allegation that they had conspired to drive down wages.

Spokespeople for Apple, Google and Intel declined to comment on the settlement, and an Adobe representative was not immediately available for comment. An attorney for the plaintiffs, Kelly Dermody of Lieff Cabraser Heimann & Bernstein, in a statement called the deal "an excellent resolution."

Corporate defendants in antitrust cases often agree among themselves what portion each will contribute towards a settlement, said Daniel Crane, a professor at the University of Michigan Law School. One likely formula would be to

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