Last week on Thursday, US District Judge Lucy Koh approved a class of employees in a class action lawsuit brought against some of Silicon Valley’s most recognized companies concerning their hiring practices. The lawsuit involving Apple, Intel, Google, Adobe, Pixar, Lucasfilm, and Intuit, alleges that the companies engaged in an “overarching conspiracy” and formed secret “anti-poaching” agreements. Specifically, at various points in time, the companies agreed not to solicit each other’s employees in an effort to keep wages and related labor costs down.
Evidence supporting the claim surrounds various documents and emails sent by top executives’ allegedly confirming the existence of a certain Do Not Call List (or “do not solicit” list). Once added to this shared resource, the companies mutually agreed not to contact or solicit these employees away from one another. For example, an email sent by Arnnon Geshuri, Google’s Recruiting Director to Eric Schmidt, Google Executive Chairman, Member of the Board of Directors and former CEO, and Laszlo Bock, Google Senior Vice President of People Operation stated the following: “[O]ur [Google] recruiters are strictly following the Do Not Call policy regarding Intel and no one has called, networked, or emailed into the company or its subsidiaries looking for talent.” Another example is an Intel document procured in the suit which states, “We cannot recruit (including calling up, emailing or enticing in any way) current Pixar employees to come to work for Intel. If a Pixar employee applies to Intel without being recruited by Intel . . . [Pat Geslinger (former Intel Senior Corporate Vice President)] will contact the CEO of Pixar for approval to hire.”
Regardless of whether the suit goes all the way to court or settles, achieving certification is a critical step. Initially, Plaintiffs’ request for an “All Employee” class was subverted on grounds that the plaintiff didn’t demonstrate common issues of law applicable to all members of the proposed class. According to Rule 23 (Class Actions), one of the prerequisites of a class action is that “the claims or defenses of the representative parties are typical of the claims or defenses of the class”. In light of this requirement and in response to the setback suffered in April, Plaintiffs attempted certification once again. This time, with a more narrowly defined “Technical Class”, they prevailed.
Three of the seven defendants have offered to settle. Pixar, LucasFilm, and Intuit have all filed Motions for Preliminary Approval of Class Settlement, and are currently awaiting Judge Koh’s approval. It looks like Apple, Google, Intel and Adobe are gearing up for a fight.