Lawsuit accuses Apple, others of 'conspiring' to keep employee wages low

By AppleInsider Staff

A new class-action lawsuit takes aim at Apple, Google, Intel and other tech companies for allegedly "conspiring to suppress compensation of their employees."

The complaint was announced in a press release on Wednesday by the law firm Lief, Cabraser, Heimann & Bernstein. The suit was filed by Siddharth Hariharan, a former software engineer at Lucasfilm, one of the companies named in the suit. Other parties include Adobe, Intuit and Pixar.

"My colleagues at Lucasfilm and I applied our skills, knowledge, and creativity to make the company an industry leader," Hariharan said. "It's disappointing that, while we were working hard to make terrific products that resulted in enormous profits for Lucasfilm, senior executives of the company cut deals with other premiere high tech companies to eliminate competition and cap pay for skilled employees."

The new lawsuit alleges that the companies in question agreed to not actively recruit each others' employees, and promised to provide notification when making an offer to another company's employee. The suit also claims that the companies agreed to cap pay packages offered to prospective employees at the initial offer.

The complaint states that the alleged alliance began in 2005 with Lucasfilm and Pixar, and continued until at least 2009 with all defendants in a so-called "no solicitation" agreement. It asserts that the "conspiracy" decreased competition for labor among the competing companies.

"Competition in the labor market results in better salaries, enhanced career opportunities for employees, and better products for consumers," attorney Joseph R. Saveri said. "We estimate that because of reduced competition for their services, compensation for skilled employees at Adobe, Apple, Google, Intel, Intuit, Lucasfilm, and Pixar was reduced by 10 to 15 percent. These companies owe their tremendous successes to the sacrifices and hard work of their employees, and must take responsibility for their misconduct."

The complaint, filed in a California Superior Court in Alameda County, seeks damages and lost pay for employees believed to have been affected by the companies' alleged actions.

In 2009, it was revealed that Apple and Google had an agreement that the two companies would not poach each others' employees while Eric Schmidt, then the search giant's chief executive, served on both boards. The "gentlemen's agreement" was said to prevent recruiting of other employees, but workers were free to apply at other companies. It eventually led to a U.S. antitrust probe of both Apple and Google.

An investigation conducted by the U.S. Justice Department found that Ed Colligan, a former chief executive of Palm, rejected an anti-poaching offer allegedly made by Apple co-founder Steve Jobs. In communications obtained, Colligan reportedly told Jobs that his proposal was "likely illegal."

Jobs allegedly told Colligan he was concerned when Jon Rubinstein, Apple's former senior engineering vice president, was named executive chairman of Palm. In the correspondence, Jobs reportedly said he was worried that Rubinstein would recruit existing Apple employees.