The civil suit was filed by five plaintiffs. It accused the tech companies of collusion between 2005 and 2009 to refrain from recruiting each other's employees.
"No cold call" agreements
Cold calling is one of the main methods used by companies in the high-technology sector to recruit employees with advanced and specialised skills, such as software and hardware engineers, programmers, animators, digital artists, Web developers and other technical professionals.[1] Cold calling involves communicating directly in any manner with another firm's employee who has not otherwise applied for a job opening. Cold calling may be done in person, by phone, letter, or email.[2] According to the legal brief filed by a plaintiff in one of the class-action cases, cold calling is an effective method of recruiting for the high-technology sector because "employees of other [high-technology] companies are often unresponsive to other recruiting strategies... [and] current satisfied employees tend to be more qualified, harder working, and more stable than those who are actively looking for employment."[3]
The challenged "no cold call" agreements are alleged bilateral agreements between high technology companies not to cold call each other's employees. The DOJ alleges that senior executives at each company negotiated to have their employees added to 'no call' lists maintained by human resources personnel or in company hiring manuals. The alleged agreements were not limited by geography, job function, product group, or time period. The alleged bilateral agreements were between: (1) Apple and Google, (2) Apple and Adobe, (3) Apple and Pixar, (4) Google and Intel, (5) Google and Intuit,[4] and (6) Lucasfilm and Pixar.[5]
The civil class action further alleges that agreements also existed to (1) "provide notification when making an offer to another [company]'s employee (without the knowledge or consent of the employee)" and (2) "agreements that, when offering a position to another company's employee, neither company would counteroffer above the initial offer."[3]
On September 24, 2010, the United States Department of Justice Antitrust Division filed a complaint in the US District Court for the District of Columbia alleging violations of Section 1 of the Sherman Act. In US v. Adobe Systems Inc., et al., the Department of Justice alleged that Adobe, Apple, Google, Intel, Intuit, and Pixar had violated Section 1 of the Sherman Act by entering into a series of bilateral "No Cold Call" Agreements to prevent the recruitment of their employees (a similar but separate suit was filed against Lucasfilm on December 21, 2010[6]). The DOJ alleged in their Complaint that the companies had reached "facially anticompetitive" agreements that "eliminated a significant form of competition...to the detriment of the affected employees who were likely deprived of competitively important information and access to better job opportunities." The DOJ also alleged that the agreements "were not ancillary to any legitimate collaboration," "were much broader than reasonably necessary for the formation or implementation of any collaborative effort," and "disrupted the normal price-setting mechanisms that apply in the labor setting."[4] The same day it filed the suit, the DOJ and the defendants proposed a settlement.[7]
A final judgment enforcing the settlement was entered by the court on March 17, 2011.[8] Although the DOJ Complaint only challenged the alleged "no cold call" agreements, in the settlement, the companies agreed to a more broad prohibition against "attempting to enter into, entering into, maintaining or enforcing any agreement with any other person to in any way refrain from, requesting that any person in any way refrain from, or pressuring any person in any way to refrain from soliciting, cold calling, recruiting, or otherwise competing for employees of the other person", for a period of five years; the court can grant an extension.[8] The settlement agreement does not provide any compensation for company employees affected by the alleged agreements.[9] Lucasfilm entered into a similar settlement agreement in December 2010.[5]
Civil class action
In re: High-Tech Employee Antitrust Litigation (U.S. District Court, Northern District of California 11-cv-2509 [10]) is a class-action lawsuit on behalf of over 64,000 employees of Adobe, Apple Inc., Google, Intel, Intuit, Pixar and Lucasfilm (the last two are subsidiaries of Disney) against their employer alleging that their wages were repressed due to alleged agreements between their employers not to hire employees from their competitors.[11][12] The case was filed on May 4, 2011 by a former software engineer at Lucasfilm and alleges violations of California's antitrust statute, Business and Professions Code sections 16720 et seq. (the "Cartwright Act"); Business and Professions Code section 16600; and California's unfair competition law, Business and Professions Code sections 17200, et seq. Focusing on the network of connections around former Apple CEO Steve Jobs, the Complaint alleges "an interconnected web of express agreements, each with the active involvement and participation of a company under the control of Steve Jobs...and/or a company that shared at least one member of Apple's board of directors." The alleged intent of this conspiracy was "to reduce employee compensation and mobility through eliminating competition for skilled labor."[13]
As of October 31, 2013, Intuit, Pixar and Lucasfilm have reached a tentative settlement agreement. Pixar and Lucasfilm agreed to pay $9 million in damages, and Intuit agreed to pay $11 million in damages.[9] In May 2014, Judge Lucy Koh approved the $20 million settlement between Lucasfilm, Pixar, and Intuit and their employees. Class members in this settlement, which involved fewer than 8% of the 65,000 employees affected, will receive around $3,840 each.[14]
The trial of the class action for the remaining Defendant companies was scheduled to begin on May 27, 2014. The plaintiffs intended to ask the jury for $3 billion in compensation, a number which could in turn have tripled to $9 billion under antitrust law.[15] However, in late April 2014, the four remaining defendants, Apple Inc, Google, Intel and Adobe Systems, agreed to settle out of court. Any settlement must be approved by Judge Lucy Koh.[16][17]
On May 23, 2014, Apple, Google, Intel, Adobe agreed to settle for $324.5 million. Lawyers sought 25% in attorneys’ fees, plus expenses of as much as $1.2 million, according to the filing. Additional award payments of $80,000 would be sought for each named plaintiff who served as a class representative.[18] Payouts will average a few thousand dollars based on the salary of the employee at the time of the complaint.[19][20]
In June 2014, Judge Lucy Koh expressed concern that the settlement may not be a good one for the plaintiffs. Michael Devine, one of the plaintiffs, said the settlement is unjust. In a letter he wrote to the judge he said the settlement represents only one-tenth of the $3 billion in compensation the 64,000 workers could have made if the defendants had not colluded.[19]
On August 8, 2014, Judge Koh rejected the settlement as insufficient on the basis of the evidence and exposure. Rejecting a settlement is unusual in such cases. This left the defendants with a choice between raising their settlement offer or facing a trial.[21]
On September 8, 2014, Judge Koh set April 9, 2015 as the actual trial date for the remaining defendants, with a pre-trial conference scheduled for December 19, 2014. Also, as of early September 2014, the defendants had re-entered mediation to determine whether a new settlement could be reached.[22]
A final approval hearing was held on July 9, 2015.[23] On Wednesday September 2, 2015, Judge Lucy H. Koh signed an order granting Motion for Final Approval of Class Action Settlement.[24]
The settlement website stated that Adobe, Apple, Google, and Intel has reached a settlement of $415 million and other companies settled for $20 million.[20] According to the settlement website, Gilardi & Co., LLC distributed the settlement to class members the week of December 21, 2015.[25]
Adobe Inc., originally called Adobe Systems Incorporated, is an American multinational computer software company incorporated in Delaware and headquartered in San Jose, California. It has historically specialized in software for the creation and publication of a wide range of content, including graphics, photography, illustration, animation, multimedia/video, motion pictures, and print. Its flagship products include Adobe Photoshop image editing software; Adobe Illustrator vector-based illustration software; Adobe Acrobat Reader and the Portable Document Format (PDF); and a host of tools primarily for audio-visual content creation, editing and publishing. Adobe offered a bundled solution of its products named Adobe Creative Suite, which evolved into a subscription software as a service (SaaS) offering named Adobe Creative Cloud. The company also expanded into digital marketing software and in 2021 was considered one of the top global leaders in Customer Experience Management (CXM).
Intel Corporation is an American multinational corporation and technology company headquartered in Santa Clara, California. It is the world's largest semiconductor chip manufacturer by revenue, and is the developer of the x86 series of microprocessors, the processors found in most personal computers (PCs). Incorporated in Delaware, Intel ranked No. 45 in the 2020 Fortune 500 list of the largest United States corporations by total revenue for nearly a decade, from 2007 to 2016 fiscal years.
United States v. Microsoft Corporation, 253 F.3d 34 is a noted American antitrust law case in which the U.S. government accused Microsoft of illegally maintaining its monopoly position in the personal computer (PC) market primarily through the legal and technical restrictions it put on the abilities of PC manufacturers (OEMs) and users to uninstall Internet Explorer and use other programs such as Netscape and Java. At trial, the district court ruled that Microsoft's actions constituted unlawful monopolization under Section 2 of the Sherman Antitrust Act of 1890, and the U.S. Court of Appeals for the D.C. Circuit affirmed most of the district court's judgments.
Qualcomm is an American multinational corporation headquartered in San Diego, California, and incorporated in Delaware. It creates semiconductors, software, and services related to wireless technology. It owns patents critical to the 5G, 4G, CDMA2000, TD-SCDMA and WCDMA mobile communications standards.
Intuit Inc. is an American business software company that specializes in financial software. The company is headquartered in Mountain View, California, and the CEO is Sasan Goodarzi. Intuit's products include the tax preparation application TurboTax, personal finance app Mint, the small business accounting program QuickBooks, the credit monitoring service Credit Karma, and email marketing platform Mailchimp. As of 2019, more than 95% of its revenues and earnings come from its activities within the United States.
The multinational technology corporation Apple Inc. has been a participant in various legal proceedings and claims since it began operation and, like its competitors and peers, engages in litigation in its normal course of business for a variety of reasons. In particular, Apple is known for and promotes itself as actively and aggressively enforcing its intellectual property interests. From the 1980s to the present, Apple has been plaintiff or defendant in civil actions in the United States and other countries. Some of these actions have determined significant case law for the information technology industry and many have captured the attention of the public and media. Apple's litigation generally involves intellectual property disputes, but the company has also been a party in lawsuits that include antitrust claims, consumer actions, commercial unfair trade practice suits, defamation claims, and corporate espionage, among other matters.
AMD v. Intel was a private antitrust lawsuit, filed in the United States by Advanced Micro Devices ("AMD") against Intel Corporation in June 2005.
Microsoft has been involved in numerous high-profile legal matters that involved litigation over the history of the company, including cases against the United States, the European Union, and competitors.
Denise Louise Cote is a Senior United States District Judge of the United States District Court for the Southern District of New York.
A.D. Bedell Wholesale Co., Inc. v. Philip Morris Inc., 263 F.3d 239, was an early appellate case testing the legality of the Tobacco Master Settlement Agreement (MSA), in this instance whether it could properly be alleged to violate the Sherman Antitrust Act.
Vringo was a technology company that became involved in the worldwide patent wars. The company won a 2012 intellectual property lawsuit against Google, in which a U.S. District Court ordered Google to pay 1.36 percent of U.S. AdWords sales. Analysts estimated Vringo's judgment against Google to be worth over $1 billion. The Court of Appeals for the Federal Circuit overturned the District Court's ruling on appeal in August 2014 in a split 2-1 decision, which Intellectual Asset Magazine called "the most troubling case of 2014." Vringo appealed to the United States Supreme Court. Vringo also pursued worldwide litigation against ZTE Corporation in twelve countries, including the United Kingdom, Germany, Australia, Malaysia, India, Spain, Netherlands, Romania, China, Malaysia, Brazil and the United States. The high profile nature of the intellectual property suits filed by the firm against large corporations known for anti-patent tendencies has led some commentators to refer to the firm as a patent vulture or patent troll.
Viacom International, Inc. v. YouTube, Inc., No. 07 Civ. 2103, is a U.S. District Court for the Southern District of New York case in which Viacom sued YouTube, a video-sharing site owned by Google, alleging that YouTube had engaged in "brazen" and "massive" copyright infringement by allowing users to upload and view hundreds of thousands of videos owned by Viacom without permission. A motion for summary judgment seeking dismissal was filed by Google and was granted in 2010 on the grounds that the Digital Millennium Copyright Act's "safe harbor" provisions shielded Google from Viacom's copyright infringement claims. In 2012, on appeal to the United States Court of Appeals for the Second Circuit, it was overturned in part. On April 18, 2013, District Judge Stanton again granted summary judgment in favor of defendant YouTube. An appeal was begun, but the parties settled in March 2014.
United States v. Apple Inc., 952 F. Supp. 2d 638, was a US antitrust case in which the Court held that Apple Inc. conspired to raise the price of e-books in violation of the Sherman Act.
Saleh v. Bush, 848 F.3d 880, was a class action lawsuit filed in 2013 against high-ranking members of the George W. Bush administration for their alleged involvement in premeditating and carrying out the Iraq War. In December 2014, the district court hearing the case ordered it dismissed with prejudice. The dismissal was affirmed by the United States Court of Appeal for the Ninth Circuit.
Google has been involved in multiple lawsuits over issues such as privacy, advertising, intellectual property and various Google services such as Google Books and YouTube. The company's legal department expanded from one to nearly 100 lawyers in the first five years of business, and by 2014 had grown to around 400 lawyers. Google's Chief Legal Officer is Senior Vice President of Corporate Development David Drummond.
Eric Gibbs is an American attorney at Gibbs Law Group LLP in the United States. He is a member of the Board of Governors of the Consumer Attorneys of California. As a part of the American Association for Justice, he co-chairs the Consumer Privacy and Data Breach Litigation Group and the Lumber Liquidators Litigation Group, and serves as the secretary for the Qui Tam Litigation Group.
Antipoaching is an anti-competitive conduct where companies conspire not to hire each other's employees.
The TFT-LCD Antitrust Litigation was a United States class-action lawsuit regarding the worldwide conspiracy to coordinate the prices of Thin-Film Transistor-Liquid Crystal Display (TFT-LCD) panels, which are used to make laptop computers, computer monitors and televisions, between 1999 and 2006. In March 2010, Judge Susan Illston certified two nationwide classes of persons and entities that directly and indirectly purchased TFT-LCDs – for panel purchasers and purchasers of TFT-LCD integrated products; the litigation was followed by multiple suits.
Lieff Cabraser is an American plaintiffs' law firm headquartered in San Francisco. The firm was founded in 1972 by Robert L. Lieff. Elizabeth Cabraser became a partner in 1981.
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