AH-Google

Tech Companies Agree to a Settlement of $324.5 Million in Wage Suit

May 25, 2014 - Written By Ray Greer

 

Creating the gadgets in your pockets, and the software behind each one takes talent. That talent comes from the many hardworking employees. However, some tech companies found a way to keep that talent in house by working together and keep employee poaching down. In doing so, tech companies also managed to keep wages down as well. This is why employees of those tech companies banded together and sued for higher wages. Now a settlement has been reached to the tune of $324.5 million in damages.

In the years of 2005 and 2009 a few of the larger tech companies in the US came to a poaching agreement; those involved were Apple, Google, Adobe and Intel. How many employees came from each company is unclear, though the total number of employees involved in the lawsuit was about 64,000. The lawsuit originally filed had the employees asking for a total of $3 billion in damages according to the L.A. Times. This is the amount that the employees feel the tech companies saved by not paying higher wages. Though this settlement is still awaiting approval by Judge Lucy Koh out of San Jose-if approved- many employees will be dissatisfied with the end result. If Judge Koh does approve the terms, this would mean each employee will only get a few thousand dollars when all is said and done. However, this suit may have been the last resort for the thousands of employees involved.

The first step taken by the employees was to reach out to the Department of Justice to investigate the matter. When the DOJ investigated, they came to a different conclusion that was in favor of the tech companies. This coming from the original DOJ investigation fillings which said, “While the [California Department of Justice] had the ability to seek civil fines, the DOJ settled their investigation regarding Defendants’ alleged misconduct without any monetary penalty.” This means that if each employee gets a few thousand, it is better than what they would’ve gotten from the DOJ investigation- which added up to $0 in penalties. Those findings enough should mean the tech companies would have no fear of taking the issue to court, so why settle?

A trial can be a very messy scene for both sides of the argument. However for tech companies a very public trial could uncover some very embarrassing interactions between them. Some such interactions come in the form of emails that have already gained traction. One such email was between Google co-founder Sergey Brin, and Late Apple CEO Steve Jobs. This email was from Jobs telling Brin, “If you hire a single one of these people, that means war.” That email was in regards to some Apple employees that were being eyed by Google. Even more so than that, in another email between Google Chairman Eric Schmidt and again, Steve Jobs, Schmidt told Jobs that they would be firing a recruiter who almost poached an Apple employee. In response, Jobs used an emoticon that referred to a smile on his face upon reading the news. These are the emails that have already been made public, the question is, what do the emails say that the four tech companies are willing to pay $324.5 million to keep out of the spotlight of a trial?