Google Inc, Apple Inc., Others Settle Anti-Poaching Lawsuit For $324M

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Google Inc, Apple Inc., Others Settle Anti-Poaching Lawsuit For $324M
ElisaRiva / Pixabay

Tech giants, including Google Inc (NASDAQ:GOOGL) (NASDAQ:GOOG), Apple Inc. (NASDAQ:AAPL), Intel Corporation (NASDAQ:INTC) and Adobe Systems Incorporated (NASDAQ:ADBE), have settled the $3 billion anti-poaching class-action lawsuit. The out-of-court settlement was reached on Thursday. Terms of the deal were not disclosed, but the companies agreed to pay $324 million. The lawsuit filed by Silicon Valley engineers had alleged that the companies had colluded to prevent their engineers from getting better job offers with higher pay from one another.

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Google joins hands with others to avert the trial

The agreement that Apple Inc. (NASDAQ:AAPL), Google Inc (NASDAQ:GOOGL) (NASDAQ:GOOG) and others announced Thursday will avert a trial that would have exposed the tech giants’ tactics to suppress wages by not hiring each other’s employees. The trial was set to begin on May 27. Had the companies lost the legal battle, the damages would have tripled to $9 billion.

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Kelly Dermody, the attorney representing the workers, said that details of the settlement will be provided on May 27. Dermody called it an excellent resolution. About 64,600 Silicon Valley engineers had sought $3 billion in damages. They said Google Inc (NASDAQ:GOOGL) (NASDAQ:GOOG), Apple Inc. (NASDAQ:AAPL) and others cheated them out of bigger paychecks between 2005 and 2009. The U.S. antitrust laws forbids companies from engaging in activities that suppress the free market. The antitrust laws allow damages to be tripled in such cases. 

Internal emails embarrass Google, Apple

A $9 billion award means each of the 64,600 aggrieved employees would have received about $140,000. Workers involved in the lawsuit were confident of winning the lawsuit due to the solid evidence presented in the case. Internal emails read during pre-trial proceedings indicated that Google Inc (NASDAQ:GOOGL) (NASDAQ:GOOG) and other major tech employers had reached a secret “gentlemen’s agreement” that required them not to recruit each other’s employees. The aim of the deal was to prevent the outflow of talent. Suppression of wages was a byproduct of the agreement.

The emails also showed that Google Inc (NASDAQ:GOOGL) (NASDAQ:GOOG) had to fire one of its recruiters to please Apple Inc. (NASDAQ:AAPL)’s Steve Jobs. The recruiter had tried to hire employees from the iPhone maker. In 2006, the search engine giant wanted to hire a respected programmer who had already resigned from Apple to operate its new engineering office in Paris. Google also wanted to hire the programmer’s colleagues. But Steve Jobs asked Google not to hire those engineers. And Google didn’t.

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