Next week a class-action civil lawsuit will be heard in San Jose to determine if Google, Apple, Pixar, Lucasfilm, Adobe, Intel, and Intuit conspired to eliminate competition for skilled labor. In anticipation of the hearing, TechCrunch has obtained evidence from the Department of Justice’s investigation in 2010 which was made public this evening for the first time. It appears to support the plaintiff’s case that the defendant companies tried to suppress employee compensation by entering into “no poach” agreements.
Previously, only the DOJ was privy to the evidence, so there was no way for the public to know whether the settlement came out the defendants’ fear they would lose. Now we know the C-level management at these companies did enter into anti-competitive agreements.
Below you can see the redacted Exhibit Joint Case Management Conference Statement attained from Pacer.org. Filed today, it contains evidence from the DOJ investigation pertinent to the upcoming civil case.
The evidence states that the defendants agreed not to poach employees from each other or give them offers if they voluntarily applied, and to notify the current employers of any employees trying to switch between them. They also agreed not to enter into bidding wars and to limit the potential for employees to negotiate for higher salaries.
In one particularly juicy piece of evidence from May 2005, Adobe’s CEO Bruce Chizen emailed Steve Jobs regarding “Recruitment of Apple Employees”. In the message, Adobe’s SVP for human resources writes “Bruce and Steve Jobs have an agreement that we are not to solicit ANY Apple employees, and vice versa.”
Additionally, documents state that there is “strong evidence that the companies knew about the other express agreements, patterned their own agreements off of them, and operated them concurrently with the others to accomplish the same objective.”
For example, Lori McAdams of Pixar wrote an internal email to others at Pixar in April 2007 stating, “I just got off the phone with Danielle Lambert [of Apple], and we agreed that effective now, we’ll follow a Gentleman’s agreement with Apple that is similar to our Lucasfilm agreement.”
The defendants ask for the case to be dismissed, stating that the DOJ found “no overarching conspiracy” and that these bilateral agreements were separate. The DOJ announced in September 2010 that it had settled with the companies, establishing that they would cease such illegal hiring practices, even though they never had to admit to wrongdoing. The DOJ currently has the right to check on the companies for compliance.
The plaintiffs seek damages for any salaried employee who worked for one of the defendants during a 4-year period in the late 2000s. That means a lot of Silicon Valley tech workers could receive a payout if the defendants lose or settle the case. The civil case will be heard by Judge Koh in San Jose starting January 26th, 2012, and we’ll have continuing updates on its progress.