Workers at Apple, Google and other tech heavyweights can proceed with an antitrust case against the companies they say stifled lucrative job movement in Silicon Valley by agreeing not to raid their rivals for employees, a federal judge ruled this week.
U.S. District Judge Lucy Koh rejected the companies’ bid to dismiss the proposed class action lawsuit filed last year on behalf of five software engineers who allege there was a secret deal to ensure the tech rivals did not poach each others’ coveted workers. The lawsuit contends the conspiracy cost tech workers millions of dollars because of lost chances to make far more money in a competitive market.
In addition to Apple, Google and Intel, the workers sued Adobe Systems, Intuit, Pixar and Lucasfilm for antitrust violations.
Koh determined the claims could proceed in large part because of the appearance that the companies’ leadership, including late Apple CEO Steve Jobs, orchestrated limits on cold-calling and recruiting employees from other tech competitors.
"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," the San Jose judge wrote.
The lawsuit, which could force the companies to pay millions of dollars in damages if proven, mirrors an antitrust case the U.S. Justice Department filed two years ago. The companies settled
with the government, admitting no wrongdoing but agreeing to avoid any joint restrictions on recruiting and cold-calling prospective employees.
The evidence already unearthed in the case includes email exchanges between Jobs and then-Google CEO Eric Schmidt discussing their desire to restrict recruiting aimed at their engineers.
Koh’s order is one step in a case that must go through more legal hurdles before reaching a scheduled June 2013 trial.
Joseph Saveri, the employees’ attorney, called the ruling a "significant step," predicting they will be able to prove the agreements were designed to "depress wages" at all of the companies.
In court papers, the companies denied a conspiracy and that any policy kept workers from being hired away. The companies declined to comment Thursday on the ruling.