Shaky Ground in Tech Labor Antitrust Case

(CN) - Tech workers must amend allegations that the late Steve Jobs and other leading Silicon Valley CEOs conspired to fix and suppress wages via "gentleman's agreements."

In a consolidated class action that was removed to U.S. District Court in San Jose, Calif., five software engineers claimed that they were harmed by a poaching ban in place from 2005 to 2009 that maintained stable internal salary structures at Adobe, Apple, Google, Intel, Intuit, Lucasfilm and Disney Pixar. These companies allegedly reached their agreements CEO-to-CEO emails, and discovery in the case has proved to be a veritable who's who of the tech world.

Google CEO Larry Page, Lucasfilm CEO George Lucas, Apple CEO Tim Cook and Intuit executive Alex Lintner have already each sat for deposition, and U.S. District Judge Lucy Koh last week ordered similar production from Facebook COO Sheryl Sandberg.

Following up that decision, Koh partly certified the class on Friday.

The 53-page ruling calls for the plaintiffs to further prove the impact of the anti-solicitation agreements, on a classwide basis.

"Due to concerns that questions of impact in this case may call for individualized inquiries that predominate over common ones, the court finds that plaintiffs must demonstrate a method for proving impact on a class-wide basis," Koh wrote.

The plaintiffs "have not, at this time, satisfied their burden with regard to the all-employee class or the technical class," she added.

Koh also denied dueling requests to strike the parties' expert reports.

Dr. Edward Leamer , an expert for the plaintiffs, provided "plausible methodology for showing generalized harm," Koh said.

The judge similarly preserved a report by Dr. Kevin Murphy, whom the plaintiffs accused of relying on information from "handpicked declarants."

"The court finds that plaintiffs' documentary evidence weighs heavily in favor of finding that common issues predominate over individual ones for the purpose of being able to prove antitrust impact," Koh wrote. "Nevertheless, the court has concerns that plaintiffs' examples, though compelling, may not be sufficient to show that all or nearly all class members were affected by the anti-solicitation agreements without additional documentary support or empirical analysis."

Koh denied motions to strike the lawsuit and to supplement the record in support of the opposition by the companies to class certification.

Koh declined to appoint the five plaintiffs as class representatives.

She confirmed Lieff, Cabraser, Heimann & Bernstein LLP and the Joseph Saveri Law Firm as co-lead counsel to the plaintiffs.

The ruling explains how the action has come in the shadow of a 2010 action by the Justice Department that the companies reached the "facially anticompetitive" agreements that "eliminated a significant form of competition to the detriment of the affected employees who were likely deprived of competitively important information and access to better job opportunities."

The department said the agreements "were not ancillary to any legitimate collaboration," "were broader than reasonably necessary for the formation or implementation of any collaborative effort," and "disrupted the normal price-setting mechanisms that apply in the labor setting," the ruling states.

Though the companies entered into stipulated final judgments with the government in 2011, they never admitted wrongdoing.

The judgments enjoined the companies from "attempting to enter into, maintaining or enforcing any agreement with any other person or in any way refrain[ing] [from] ... soliciting, cold calling, recruiting, or otherwise competing for employees of the other person," according to the ruling.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit