Tech firms settle job-poaching lawsuit

San Jose Mercury News

In a case that exposed the dark side of hiring practices in Silicon Valley, Apple Inc., Google Inc., Intel Corp. and Adobe Systems Inc. have settled a major lawsuit alleging they colluded not to poach employees from each other, according to a letter filed Thursday with the federal judge handling the case.

The letter, from lawyers representing tens of thousands of employees who sued over the “no poaching” agreements, does not include an amount, but reveals that the terms of the settlement will be presented by May 27 to U.S. District Judge Lucy Koh.

The 64,000 employees suing the companies were entitled to as much as $3 billion in damages, according to experts who would have testified on their behalf at trial. Experts for the companies had countered in court papers that the conduct did not cost workers much, if any, money, and disputed claims that it discouraged engineers and others from switching employers.

The companies were scheduled to go to trial in the case in late May, facing the prospect of allegations that top executives, including late Apple CEO Steve Jobs and Google CEO Eric Schmidt, cut secret deals to prevent hiring movement in Silicon Valley.

Apple and Google declined comment. Intel spokesman Chuck Mulloy would only say the company continues to deny the poaching allegations and “elected to settle this matter in order to avoid the risks, burdens and uncertainty of ongoing litigation.”

Adobe could not immediately be reached for comment.

Kelly Dermody, a lawyer for the workers, declined to discuss specifics of the settlement or whether it would affect valley hiring practices.

The case already has blown the lid off on the way Silicon Valley’s most powerful executives dealt with the region’s hypercompetitive job market, revealing internal emails with damaging remarks about suppressing recruitment between 2005 and 2009. In one such 2005 email exchange, Jobs reportedly told Google co-founder Sergey Brin: “If you hire a single one of these people, that means war.”

Recently released documents show that one tech power, Facebook Inc., rebuffed pressure to take part in the no-poaching agreements. Koh in a recent ruling noted how Facebook refused to take part in “Google’s anti-solicitation agreements.”

The judge has repeatedly found there was ample evidence of anti-competitive conduct for the case to proceed to trial. Pixar and Lucasfilm, as well as Intuit, previously settled in the case for about $20 million.

The companies settled a similar antitrust case filed by the U.S. Justice Department several years ago. The Justice Department has an identical antitrust case against eBay pending in federal court.