Silicon Valley’s Largest Companies Face Class Action Over Employment Violations

March 29, 2018

A lawsuit filed in 2011 by five software engineers against some of Silicon Valley’s largest employers has been granted class action status by a U.S. Judge, Reuters reports.

The initial lawsuit named Apple, Google, Adobe Systems and Intel Corp. among others, with the plaintiffs accusing these companies of an “overarching conspiracy” to keep employee compensation capped and to reduce employee mobility through alleged no-hire pacts effective between 2005-2009. The suit claims that this agreement between the companies was in violation of the Clayton Act and Sherman Act antitrust laws. As evidence of their claim, the plaintiffs contend that each of the companies involved had direct connection to late Apple chief executive Steve Jobs, or had at least one common board member with Apple—thereby fingering Apple at the heart of the controversy.

In layman’s terms, the companies involved are accused of purposefully agreeing together not to poach one another’s employees in order to keep salaries low, essentially eliminating the employees’ ability to seek better pay.

By granting the case class action status, presiding U.S. District Judge Lucy Koh has opened the door for the five plaintiffs to be joined by over 50,000 others in the suit, including software and hardware engineers, digital artists, web developers and other technical professionals. It also means that the participants in the class action suit may be entitled to greater settlements than if the plaintiffs had moved forward with individual lawsuits.

Bloomberg reports that Intuit, Pixar and LucasFilm were also part of the lawsuit, but that these companies have agreed upon a tentative collective settlement of $19 million, pending approval by Judge Koh.

The awarding of class action status to this suit in itself represents a small victory in holding large companies accountable to ensure employees’ rights are not violated in the conduct of their business.