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Big Tech Anti-Poach Lawsuit Reaches $415 Million Settlement

September 3, 2015 - Written By Mike Carey

Today, Judge Lucy Koh, authorized a class action lawsuit settlement between a group of about 6,500 tech employees and the companies they work for like Google, Apple, Intel, and Adobe.  The employees claimed that the big tech giants had a non-poaching agreement between themselves to not steal each others employees.  The employees claimed this hurt their pockets by not being able to get higher salaries because their employers knew they would not be recruited by a bigger or direct competitor.  The companies argued they did nothing wrong and didn’t break any laws by doing this.

This is the second agreement reached between the two sides in this court battle, with the first one being thrown out by Judge Koh back in January for not being fair enough for the employees bringing the suit.  Lucy Koh also stated back in January that the $81 Million being requested by the lawyers was not fair and was too high of a figure.  The two sides went back to the drawing board and finally came to agree on $415 million which equals an average amount of about $5,770 per employee.  With the approved settlement announced the lawyers will get $40 Million.

Google and Apple were big players in this agreement with evidence being presented to the courts of e-mails sent between Steve Jobs and Eric Schmidt about the recruiting department in Google actively pursuing an Apple employee.  The e-mails that ensued from Schmidt demanded answers about why this was happening and that this practice needed to stop immediately.  It was discovered during the trial that Schmidt had 2 recruiters fired for going against this policy and actively recruiting from a company that it held this understanding with.  Schmidt then threatened to terminate more employees if they continued to break company policy. California Supreme Court ruled in 2008 that a non-compete clause in employee contracts, which would bar employees from leaving for a direct competitor, are not enforceable.  There is a large majority of people who feel this ruling played a big part of the tech giants making California their home.  They could scoop up anyone they felt would have the biggest impact on growing their company.  What Google, Apple, Intel, Adobe did here was create their own non-compete law and tried the best they could to enforce it.