Discovered Emails Suggest Possible Antitrust Violations By Tech Giants

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nopoachingBy IT-Lex Intern Karina Saranovic (LinkedIn)

Recently-discovered internal emails reveal that high-level executives at Apple and Google consented to no-poaching agreements, because they believed such practices would reap mutual financial benefits, stated U.S. District Judge Lucy Koh at a hearing last month.  A no-poaching agreement is one where the parties agree not to hire workers who used to work for each other’s company. These kind of deals are generally prohibited by antitrust laws, which find the agreements to be impermissible limitations on the employees’ freedom of movement. The laws are in place to protect a public policy that favors and allows people to move from job to job.

Despite this compelling email evidence, will Judge Koh allow this case to proceed as a class action?

On one hand, Judge Koh voiced her knowledge of the executives’ predilection towards a collective hiring approach, when they drafted the no-poaching agreements. Yet, she admitted that there were many “holes” in plaintiffs’ reasoning, thus questioning their “key economic analysis.” Judge Koh did not finalize her decision on this matter at this recent hearing, but if she allows this to move forward as a class action, plaintiffs could be entitled to a much larger settlement.  Significantly, she ordered Apple’s CEO, Tim Cook and Google’s Chairman, Eric Schmidt to be deposed.

This is not the first time no-poaching agreements have been investigated by the courts, and not even the first time that Google and Apple have been involved. From Mashable n 2010:

The Department of Justice has reached a settlement with Adobe, Google, Intel, Intuit, Apple and Pixar that prevents the companies from entering “no-poach” agreements for each other’s employees.

Additionally, the federal and California governments are also investigating eBay, for an alleged no-poach agreement with Intuit, the company that makes Quickbooks. Those actions were just commenced in November, so maybe these cases will intertwine at some point.

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