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Tuesday, February 27, 2024
Courthouse News Service
Tuesday, February 27, 2024 | Back issues
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Tech Workers Stay Firm in Wage Conspiracy Suit

(CN) - Attempts by Apple and other tech giants to dismiss wage-conspiracy claims hang on a "far-fetched premise that their misconduct amounts to 'nothing more' than 'parallel behavior among pairs of defendants,'" workers told a federal judge.

The U.S. Department of Justice brought the employment and recruitment practices at Adobe, Apple, Google, Intel, Intuit, Lucasfilm and Disney Pixar to light in a 2010 suit that said the companies had agreed to restrict the mobility of their skilled employees.

Intuit, Lucasfilm and Pixar reached a $20 million settlement with the government, still denying any wrongdoing, and a federal judge approved the deal this past November.

Adobe, Apple, Google and Intel still face the government's claims, however, and all seven companies are also still battling a consolidated class action in San Jose, Calif.

The civil suit alleges that the tech giants agreed not to recruit one another's employees in CEO-to-CEO emails and "conspired to suppress, and actually did suppress, employee compensation to artificially low levels" from 2005 to 2009.

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

Four companies - Adobe, Apple, Intel and Google - individually moved for summary judgment on the San Jose, Calif., case in January.

Apple's 14-page motion claimed that 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.

Intel separately claimed 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."

Google did not dispute entering into three do-not-cold-call agreements and called the plaintiffs' claims "extravagant." Citing a single bilateral agreement with Apple, Adobe said there was no inference that it joined a broader conspiracy.

The companies also jointly moved for summary judgment based on a 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.

Noting that the Justice Department says the agreements "disrupted the normal price-setting mechanisms," and thereby suppressed compensation, the workers say that Leamer's analysis has support.

"Defendants' four individual motions for summary judgment serve a single purpose: to contest the sufficiency of the substantial evidence as to each defendant's participation in the alleged conspiracy," the consolidated opposition, filed Thursday, states. "Defendants' joint motion for summary judgment is nothing more than a vehicle for Defendants to refer to their separate motions to exclude Dr. Edward E. Leamer's testimony."

The opposition also notes that the tech companies previously failed to challenge the certification of a proposed class of 60,000 to 100,000 workers who were employed "in widely varying jobs and received vastly different compensation set by each defendant's unique practices" - and to strike Leamer's testimony.

"This is the fourth time defendants have asked the court to accept the far-fetched premise that their misconduct amounts to 'nothing more' than 'parallel behavior among pairs of Defendants,'" the plaintiffs said. "The court should reject defendants' fourth attempt for the same reasons the court rejected their prior three."

Outlining four points, the plaintiffs said the companies "finally confirmed what has long been obvious."

"Setting aside what they fail to address, defendants' five motions for summary judgment are notable for what they admit," the 57-page opposition states. "First, defendants concede the bilateral anti-solicitation agreements as alleged. Second, defendants do not meaningfully contest the existence of the alleged conspiracy. Instead, each claims not to have joined it. Third, defendants concede that their alleged misconduct violated the antitrust laws per se."

The filing adds: "Defendants have thus finally confirmed what has long been obvious: the Antitrust Division of the United States Department of Justice understood the facts and properly applied the antitrust laws when it found Defendants' agreements to be 'per se unlawful' and 'facially anticompetitive because they eliminated a significant form of competition to attract high-tech employees, and, overall, substantially diminished competition to the detriment of the affected employees who were likely deprived of competitively important information and access to better job opportunities.'"

Workers say high-level executives - including late Apple CEO Steve Jobs, Google CEO Eric Schmidt, Pixar President Ed Catmull, Intuit Chairman Bill Campbell and Intel CEO Paul Otellini - participated in the "gentleman's agreements" that aimed to avoid so-called "bidding wars" over employees.

The workers added, pointedly: "With respect to the alleged conspiracy as a whole, defendants advance no justification whatsoever."

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