Judge rejects 7 tech companies' bid to dismiss poaching suit

Proposed antitrust class action against Apple, Google, Intel and others will go forward

People by the thousands are turning out in droves these days to pick up whatever Apple Inc. is selling. But this time, Northern District of California Judge Lucy Koh wasn’t buying it.

Apple, Adobe Systems, Google Inc., Intel Corp., Intuit Inc., Lucasfilm Ltd. and Walt Disney Co.’s Pixar unit last week were ordered by Judge Koh to face an antitrust lawsuit under the federal Sherman antitrust law and California’s antitrust legislation, the Cartwright Act. The lawsuit alleges that the companies conspired not to poach each other’s employees.

The companies had brought a claim under California’s unfair competition law to dismiss the suit.

In the proposed class action, In Re: High-Tech Employee Antitrust Litigation, five software engineers claim that the seven companies fixed employee compensation at low rates by eliminating competition for skilled labor.

Judge Koh said that the existence of such an anti-poaching agreement between the companies infers that the pacts were negotiated, reached and policed at the highest levels of each company.

“The fact that all six identical bilateral agreements were reached in secrecy among seven defendants in a span of two years suggests that these agreements resulted from collusion, and not from coincidence,” Koh said.

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.

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

For more on the story, read Reuters.

For InsideCounsel’s previous coverage on the matter, read “7 major tech companies accused in anti-poaching lawsuit.”

Contributing Author

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