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Businesses The Courts

Silicon Valley Workers May Pursue Salary-Fixing Lawsuit 130

Posted by Unknown Lamer from the next-thing-they'll-be-letting-them-unionize dept.
First time accepted submitter amartha writes with news that a lawsuit alleging Silicon Valley companies of colluding to lower wages is going forward as a class action. From the article: "Roughly 60,000 Silicon Valley workers won clearance to pursue a lawsuit accusing Apple Inc, Google Inc, and others of conspiring to drive down pay by not poaching each other's staff, after a federal appeals court refused to let the defendants appeal a class certification order."
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Silicon Valley Workers May Pursue Salary-Fixing Lawsuit More

Silicon Valley Workers May Pursue Salary-Fixing Lawsuit

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  • IANAL, but... (Score:5, Interesting)

    by jddeluxe ( 965655 ) on Wednesday January 15, 2014 @11:37AM (#45966193)
    It might be difficult to prove the INTENT of the "no poaching" agreement was to suppress wages. Unless any of the defendants were stoopid enough to refer to such in emails or other discoverable documentation.

    • Re:IANAL, but... (Score:4, Insightful)

      by 0123456 ( 636235 ) on Wednesday January 15, 2014 @11:53AM (#45966389)

      How can it not suppress wages? Do you really think Joe Programmer will earn less if three other companies want to hire him, or if those three companies collude together to not hire each others' employees?

    • Re:IANAL, but... (Score:5, Insightful)

      by dkleinsc ( 563838 ) on Wednesday January 15, 2014 @11:59AM (#45966459) Homepage

      They have a demonstrably anti-competitive agreement between purchasers of a service to make each seller only able to deal with one of the purchasers, creating a monopsony. Textbook macro basically argues that the effect of a monopsony is that the only buyer in the market now has basically complete control of the terms of any agreement with the seller, because the seller's only option is to not sell his product.

      Another way of describing this: Imagine you work for Amazon. Without these agreements, you have these options:
      1. Accept a 3% raise to continue working at Amazon.
      2. Accept a 25% raise to go work for Google.
      3. Not work at all and be unemployed or at least accept a massive wage cut.

      With these agreements your options now are:
      1. Accept a 3% raise to continue working at Amazon.
      2. Not work at all and be unemployed or at least accept a massive wage cut.

      This is inherent in these kind of agreements. There's no need to prove intent.

      • but it didn't remove the option. (Score:5, Informative)

        by YesIAmAScript ( 886271 ) on Wednesday January 15, 2014 @12:12PM (#45966609)

        The agreement was not to reach out and poach others' workers. It wasn't to refuse to hire them. You still had the option of getting a 25% raise to go to Google, all you have to do is apply to Google.

        The agreement didn't reduce the options available to people, it just made it so the engineer had to take the first step, the recruiter wouldn't call you to entice you.

        • Re:but it didn't remove the option. (Score:4, Insightful)

          by ranton ( 36917 ) on Wednesday January 15, 2014 @12:39PM (#45966989)

          The agreement was not to reach out and poach others' workers. It wasn't to refuse to hire them. You still had the option of getting a 25% raise to go to Google, all you have to do is apply to Google.

          The agreement didn't reduce the options available to people, it just made it so the engineer had to take the first step, the recruiter wouldn't call you to entice you.

          With the exception of my first job and one time that I relocated, every job I have ever had was offered to me when I wasn't even looking for work. I am confident that my next job will probably be offered to me by an ex-coworker, a friend of a friend, or someone else who knows I will be an asset their company and has enough money or interesting enough work to entice me away from my current employer. My current employer did the exact same thing so it wouldn't catch them by surprise. If you aren't constantly worried that your employees are going to jump ship, it is either because you are compensating them very well or you have crap employees.

          If you are doing things right, by your 30s employers will be coming to you not the other way around. If there are agreements out there stopping companies from reaching out to me with job offers that would certainly reduce my opportunities.

          • Also consider the horrendous difficulty of getting through automated HR scanner processes [consumerist.com]. You have to win Buzzword Bingo, and then you have to be matched to a position the company is actively looking to fill.

            That's a nerve-wracking experience in the best of times; however, if you've got somebody inside the company actively tracking your application status and staying on the HR people not to let it fall through the cracks, that's a big benefit to your sanity and your chances of successfully landing a new

          • Me too. I've not had to do a serious job hunt for a long time; technical people of a certain level are in relative demand compared to other skillsets.

            The practice of poaching employees to acquire needed skillsets, and employees benefitting from higher salaries as a result of this competition, is an old and honorable practice in the tech industry. This is an attempt to undermine competition and so the libertarians here should be cheering for the plaintiffs to win....anything else is inconsistent with a fre

          • I was somewhat surprised when the wind direction changed in my case. Not 5 years ago, I was scrambling, applying for jobs that paid peanuts, etc. These days, I get 3-5 emails/calls/etc. from recruiters per week, offering a lot more than I'd ever thought of making 5 years ago -- and I'm "happily" employed at the moment. I'm 29 now, so I guess I beat your assertion by a year :p The real question is, where would I be if I had my head on straight right out of HS, instead of bumbling around for 5 years or s

        • The agreement was not to reach out and poach others' workers. It wasn't to refuse to hire them. You still had the option of getting a 25% raise to go to Google, all you have to do is apply to Google.

          The agreement didn't reduce the options available to people, it just made it so the engineer had to take the first step, the recruiter wouldn't call you to entice you.

          Assume this is true: people still got paid less because Google didn't call them and offer the 25% raise.

          To come at it from a different angle: why did the companies discuss and agree to this, if not to save money? If they want to argue that it was *only* to reduce turnover ... well why did they think people would leave? Because they'd be offered better salary or compensation.

        • Wait, so now the law is that colluding to reduce workers' wages is only illegal if there's no possible way around the collusion?

          That's new information. Thanks.

      • I know Google is fond of buying up companies but I was not aware they had bought ALL of them.

        Because otherwise your whole argument falls to pieces when you realize that someone can leave Amazon/Google/Apple and work at ANY OTHER COMPANY. Often with VC funding paying huge salaries. So in what way does a gentleman's agreement not to poach drive down wages?

        Furthermore, the agreement was not to SEEK OUT employees of those other companies - they can always move between companies of their own volition. So in

      • Re: (Score:1)

        by defaria ( 741527 )
        Bullshit. Go work for any of a thousand other companies or start your own business. You are pushing a false dichotomy.

      • Re: (Score:1)

        by Lynal ( 976271 )
        It's a little more complicated than that. The issue is match quality between workers and firms. Match quality increases over a worker's tenure at a firm (as they learn the systems / practices / whatever). To better model the issue you'll want to include training costs and long term contracts.

        For example, it won't work out if a firm trains workers and then those workers just find better jobs, so one solution is long term contracts. Long term contracts may be forbidden, so firms need other ways to reta

      • Re:IANAL, but... (Score:4, Informative)

        by Bite The Pillow ( 3087109 ) on Wednesday January 15, 2014 @01:19PM (#45967575)

        The case evolves around a comment made by Appleâ(TM)s late-CEO Steve Jobs to Palmâ(TM)s CEO: âoeWe must do whatever we can to stop cold calling each otherâ(TM)s employees and other competitive recruiting efforts between the companies.â

        Copied directly from the article. No logic needed. No need to prove intent because It's right there in the comments at the core of the entire case.

        I do agree that these whiny millennials could do the normal thing and occasionally look for other options and therefore lost nothing, but the law does not look favorably on anticompetitive practice, so that statement is pretty much all they needed.

    • Reading over the original judge's order to allow the antitrust lawsuit to continue [scribd.com], it seems that the DOJ gathered enough evidence to show that the actions from the companies were detrimental to the employees.

      After receiving documents produced by Defendants and interviewing witnesses, the DOJ concluded that Defendants reached “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.” DOJ Complaint against Adobe, et al. (“DOJ Adobe Compl.”), Harvey Decl. Ex. A, at 2, 14; DOJ Complaint against Lucasfilm (“DOJ Lucasfilm Compl.”), Harvey Decl. Ex. D, at 2, 15, 22; CAC

      112. The DOJ also determined that the agreements “were not ancillary to any legitimate collaboration,” “were much 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.”

    • Re:IANAL, but... (Score:5, Informative)

      by ranton ( 36917 ) on Wednesday January 15, 2014 @12:22PM (#45966769)

      It might be difficult to prove the INTENT of the "no poaching" agreement was to suppress wages. Unless any of the defendants were stoopid enough to refer to such in emails or other discoverable documentation.

      What other purpose could "no poaching" agreements possibly have? Their only purpose is so a company does not have to pay a salary high enough and/or create a work environment good enough to keep the employee from leaving.

    • It might be difficult to prove the INTENT of the "no poaching" agreement was to suppress wages.

      The legal standard for civil cases is on the "preponderance of the evidence", i.e. the proposition is more likely to be true than not. If it transpires before the court that the intent of the "no poaching" agreement might have been promoting gentlemanly conduct in HR, might have been based on the belief that employees become more productive the longer they have been in a team, but probably was to drive down wages, then the judge must rule in favour of the plaintiff.

      Of course you cannot simply think of a hyp

  • Post the judgement on Google busses (Score:5, Funny)

    by bob_super ( 3391281 ) on Wednesday January 15, 2014 @11:54AM (#45966395)

    I'm sure the people protesting in SF will be glad to hear that the Googlers are, in fact, underpaid.

  • ...Or do they simply have circumstantial evidence? For, if the companies got into a pact via a "gentleman's agreement" - an agreement not written down on paper and not recorded in speech anywhere, potential employees will have a tough time proving their case.

    Disclaimer: I support Google, Apple and their ilk.

  • The times, they are a-changing. (Score:5, Interesting)

    by jtownatpunk.net ( 245670 ) on Wednesday January 15, 2014 @12:09PM (#45966555)

    Not. Looks like things haven't changed in generations.

    My grandpa moved from the east coast to the west coast back in the 50s because of non-poaching agreements in the aircraft industry.

  • Not the only Case, just first one publicly (Score:1)

    by Anonymous Coward

    Years ago when I was doing jobbie work I found out that the job shops in the Detroit Metro area had a similar agreement not to hire people working for other job shops. It was a kind of a "Don't piss in your neighbors backyard" thing. Turns out a lot more companies are doing this in a lot more places than you might guess. Can anyone say "slave labor?". This kind of thing starts out in the board rooms and propagates down to the hiring floor, not the other way around. This is a very revealing insight into

  • I worked for HP about 15 years ago. (Score:5, Interesting)

    by mark_reh ( 2015546 ) on Wednesday January 15, 2014 @01:27PM (#45967691) Journal

    Every year the HR people would make presentations to us about how they got together with HR people from other big engineering companies in the valley and decided upon job descriptions and pay and benefits packages, and by the way decided that the COL raise this year would be X%.

    My coworkers, most of whom were oblivious to the big picture, would cheer at the annual pay raise and I would grumble about the salary fixing that they were proudly presenting.

    I wonder if I can get in on the class-action suit...

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