LG, Samsung Facing Three Lawsuits Over Employee "Poaching"

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In the world of consumer electronics, the two South Korean giants LG and Samsung are not only incredibly similar in terms of the sort of products that they offer, but also in the way that the companies operate, too. Perhaps unsurprisingly then, the two firms often see employees move from one firm to the other, and sometimes back again. The problem has become so big and so common that the two firms are embroiled in not just one or two, but three class action lawsuits surrounding the issue. The latest of which alleges that the two firms have entered into a sort of wage-fixing operation to give employees little incentive to join one or the other.

The latest class-action lawsuit, filed by a LG Employee in California federal court alleges that the two companies, operating in the US, are in violation of federal law under the Sherman Act by keeping wages low, in order to deter competition as well as keep companies at one company, rather than have them jump ship to another. The complaint alleges that both LG and Samsung have entered into a long-standing agreement, and one that has been “reached at the highest levels of the company’s corporate hierarchy — not to solicit or hire one another’s workers”. The complaint goes on to state that LG and Samsung have together agreed that they will keep their wages at the same level, in order to prevent employees looking to “jump ship” in order to earn more money while working in the same field. In the same vein, a similar lawsuit filed by a former LG Treasury employee, Jose Ra, alleges that the two companies deliberately kept their wages low, in order to stifle competition between the two companies.

A third lawsuit, filed this year on September 9th by A. Frost, says that in 2013 he was approached by someone from LG to come and fill a position, but was later contacted by the same person via LinkedIn saying that “I made a mistake! I’m not supposed to poach LG for Samsung! Sorry! The two companies have an agreement that they won’t steal each other’s employees”. Neither LG nor Samsung have officially confirmed any of this, and it’s unlikely that they will do until some sort of federal investigation takes place, which will of course depend on the outcomes of these class action lawsuits.