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7 major tech companies accused in anti-poaching lawsuit

Proposed class action accuses Apple, Google and others of conspiring to keep employee compensation low

Breaking news: Someone is suing Apple and Google! This time, however, a few other companies are in the mix. Reports surfaced yesterday that a civil lawsuit against a number of large technology companies over anti-poaching allegations will move forward, although according to a federal judge, the suit may be broken up into several class actions.

Five software engineers claim in In Re: High-Tech Employee Antitrust Litigation that Apple Inc., Adobe Systems, Google Inc., Intel Corp., Intuit Inc., Lucasfilm Ltd. and Walt Disney Co.’s Pixar unit conspired to fix employee compensation at low rates by eliminating competition for skilled labor.

In 2010, the companies all agreed to settle a Department of Justice (DOJ) probe that stops them from agreeing to refrain from poaching the other companies’ employees. At the time of the settlement, the DOJ confirmed that the companies had agreed not to cold call one another’s employees dating back to 2005. Such practices, the DOJ said, restrained competition and hurt employees.

In the federal court hearing yesterday, U.S. District Judge Lucy Koh said that such relationships between companies makes it hard to believe that they should not face an antitrust lawsuit. Potentially supporting her argument was the disclosure of a 2007 note from Palm Inc.’s CEO to Apple’s Steve Jobs noting that such an anti-poaching arrangement is “likely illegal,” Reuters reports.

The companies, however, claim the anti-poaching agreements are a unified attempt to protect collaboration between one another, and are not a conspiracy.

Judge Koh noted that separate class actions over each agreement may make better sense, and that even if she dismisses some of the claims, she will allow the plaintiffs a chance to revise and refile their complaint. She also scheduled another hearing on the topic for April.

For more on the story, read Reuters and Bloomberg.

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