Four major tech companies including Apple and Google have agreed to pay a total of $324 million to settle a lawsuit accusing them of conspiring to hold down salaries in Silicon Valley, sources familiar with the deal said, just weeks before a high profile trial had been scheduled to begin
Tech workers filed a class action lawsuit against Apple Inc, Google Inc, Intel Inc and Adobe Systems Inc in 2011, alleging they conspired to refrain from soliciting one another’s employees in order to avert a salary war. They planned to ask for $3 billion in damages at trial, according to court filings. That could have tripled to $9 billion under antitrust law.
There were more than 60,000 workers in the class. Class members claimed that the “no cold calls” agreement resulted in $3 billion of lost wages, a far cry from the settlement agreement.
The companies, which are some of the world’s richest, must think that is a bargain. At a moment when Silicon Valley is losing some of its luster even on its home territory, the antitrust case depicted the upper levels of the valley’s executive suites as a cozy old boys’ network. Private deals are made, and then the executives send emails saying they wanted everything to remain secret.
Originally there were seven defendants. Settlements with Lucasfilm and Pixar (both now owned by Disney) and Intuit were reached last year. Those companies agreed to pay a total of $20 million — small change in the valley.
Sounds like clear victory for the defendants. They avoid more embarrassing e-mails and testimony and end up paying just a few thousand dollars per employee, surely less than they saved through this scheme, which also suppressed the wages for plenty of other employees outside the class.
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