Apple Inc. (AAPL) and Google Inc (GOOG) Avoid Embarrassing Trial

Judge, Lucy Koh, rejected a $324.5 million agreement as inadequate amount and as a follow up, a San Jose federal court has revised the agreement. According to Koh, roughly 64,000 workers involved in this case should be paid at least $380 million along with the attorney fees. Google Inc (NASDAQ:GOOGL), Apple Inc. (NASDAQ:AAPL), Intel Corporation (NASDAQ:INTC) and Adobe Systems Incorporated (NASDAQ:ADBE) have accepted this agreement in order to avoid an embarrassing trial.

Reason For The Allegation

This law suit was filed by the employees of the above mentioned organizations alleging that the companies had secretly formed an anti poaching cartel from 2005 to 2009. According to this secret agreement between the companies they agreed not to hire employees from each other as an attempt to keep a cap on salaries. This prevented the employees from leaving their current employer for a better paying job and limited employment mobility.

The lawsuit was filed in 2011 and sought $3 billion in damages that could have been tripled under the US antitrust laws. The lawyers for the workers decided to settle after they concluded that it was difficult to prove the alleged conspiracy to a jury.

How Did The Case Settle Down?

The alleged collusion between these companies stopped after the US state department started an investigation that resulted in the filing of an antitrust complaint against the above mentioned organizations in the year 2010. The case filed by the justice department was settled without the companies admitting their guilt or paying any fines. The evidence gathered in the ensuing class action lawsuit has exposed emails exchanged between the top management of these companies which have cast these top executives in an unflattering light.

In fact the late CEO Steve Jobs of Apple Inc. is represented as the master mind behind this secret collusion which was designed to minimize the chances of top computer programmers and other employees from defecting to the competition.

The lawsuit alleges that this anti poaching cartel created by Jobs suppressed the wages of the employees to quite a great extent.