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Wednesday, June 19, 2024 | Back issues
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Tech Giants Shrug Off Wage-|Suppression Allegations

(CN) - Claims that Silicon Valley tech giants conspired to suppress workers' wages are bogus, Apple and others say, claiming that there is "nothing more" to the allegations than do-not-cold-call agreements.

In a consolidated class action in 2012, five software engineers claimed they were harmed by a years-long poaching ban that maintained stable internal salary structures at Adobe, Apple, Google, Intel, Intuit, Lucasfilm and Disney Pixar.

The companies allegedly reached the agreements via "gentleman's agreements" in CEO-to-CEO emails. Discovery in the case proved to be a veritable who's who of the tech world, including depositions by Google CEO Larry Page, Lucasfilm CEO George Lucas and Apple CEO Tim Cook.

In April 2013, U.S. District Judge Lucy Koh partly certified the class and ordered the plaintiffs to further prove the impact of the agreements, classwide.

"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.

The 9th Circuit reportedly refused Tuesday to let the companies appeal Koh's certification of the class.

Workers claim that their employers "conspired to suppress, and actually did suppress, employee compensation to artificially low levels" from 2005 to 2009, and "prohibited the companies' solicitation of any of their employees, regardless of geography, job description, or time period."

Responding to the allegations, four companies - Adobe, Apple, Intel and Google - individually moved for summary judgment last week based on alleged lack of evidence of impact or damages.

Apple, in a 14-page motion, said there was no single "overarching conspiracy," as the plaintiffs claimed, but "only three separate, bilateral do-not-cold-call agreements" between the company and Adobe, Pixar and Google.

"Apple entered into each of the three DNCC [do-not-cold-call] agreements at different times, for different reasons, and to serve its own self-interests - not as part of an overarching conspiracy among the seven defendants," the motion states. "Apple's agreement with Adobe had its roots in the early 1980s during both companies' formative years, arising out of deep collaborations essential to Apple's success. Apple's arrangement with Pixar had its beginnings in the late 1990s, arising from Steve Jobs's unique dual roles as Pixar's founder, chairman, CEO and majority shareholder and as Apple's founder, CEO and board member. ... Apple's DNCC agreement and no cold calling practices with respect to Google began in 2005, arising from extensive technical collaborations between the two companies. The agreement continued during Google CEO Eric Schmidt's service on Apple's board, reflecting Apple's policy not to cold call employees of companies whose senior executives served on its board, thereby avoiding a real or apparent conflict of interest for those board members."

Intel separately said evidence suggested it "at most" entered into a single bilateral do-not-cold-call agreement with Google, and that the plaintiffs "have no direct or circumstantial evidence showing that Intel entered into the broader 'overarching conspiracy' alleged in the amended complaint."

The 15-page motion adds: "because the Intel/Google DNCC agreement was indisputably in Intel's self-interest irrespective of the conduct of the other defendants, no inference that Intel joined any broader conspiracy may be drawn from that agreement."

Google similarly did not dispute entering into three do-not-cold-call agreements and called the plaintiffs' claims "extravagant."

"Even after extensive discovery, plaintiffs have been forced to concede that there is no direct evidence to support this extravagant claim," Google's 18-page motion states. "As a result, plaintiffs' case relies entirely on circumstantial evidence of supposedly parallel conduct and opportunities to conspire. The undisputed evidence makes clear that such a record falls far short of entitling plaintiffs to a trial against Google."

Citing a single bilateral agreement with Apple, Adobe said there was no inference that it joined a broader conspiracy.

"Adobe did not know of any broader agreement or conspiracy. Adobe did not know or care whether other defendants had bilateral agreements. Adobe's bilateral agreement with Apple was in Adobe's self-interest without regard to what any other company did or didn't do," the 16-page motion states.

The companies also jointly moved for summary judgment based on their motion to exclude the expert testimony of economist and statistician Dr. Edward Leamer, who found that the alleged agreements had a widespread, adverse effect on pay.

Workers claim the Justice Department corroborated Leamers analysis in concluding that the agreements "disrupted the normal price-setting mechanisms" and thereby suppressed compensation.

Koh is scheduled to hear the case on March 20.

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