FOUR OF SILICON VALLEY'S biggest players have dodged a bullet in an out of court settlement for $324m that allowed them to avoid an upcoming court case that could have led to damages of up to $9bn.
A class action lawsuit against Apple, Google, Intel and Adobe was brought in 2011, claiming that the foursome colluded to keep salaries down in the technology industry by agreeing not to headhunt each others' staff.
Reuters reports that a series of emails between the late Steve Jobs of Apple, former Google CEO Eric Schmidt and others plotted to slow career progression for engineers by avoiding attempts to poach employees from rivals.
Court documents reveal that a Google recruiter was fired for making an offer to an Apple employee. When Schmidt informed Jobs of the termination by email, Jobs forwarded the note to his human resources department marked with a smiley face.
Apple had also threatened Palm, now absorbed into HP, with patent lawsuits if it made recruitment offers to Apple staff.
HP has recently settled a class action brought by Palm investors who felt that they had lost out when HP had abandoned support of WebOS.
While the companies admitted that no-hire agreements had been in place, they denied engaging in a conspiracy to drive down wages, and argued that employees should have to take legal action individually, rather than as a class action.
The US Department of Justice had already conducted a probe into no-hire deals by Apple, Google, Adobe and Intel in 2010, and the companies had agreed not to enter into such arrangements.
In addition to Pixar, Lucasfilm and Intuit, which between them had already agreed to pay $11m to settle their involvement in the no-hire plot, the four firms will now pay $324m to settle the case, subject to approval by US District Court Judge Lucy Koh at a hearing next week.
If Judge Koh declines to approve the settlement and the suit is heard, the employee collective is seeking damages of up to $3bn, which under US antitrust law could be tripled to $9bn. The terms of the settlement are not yet clear, but it is understood that they will be made public on 27 May. µ