Silicon Valley hiring practices lawsuit gets class action status

Major companies accused of colluding to push down wages.

Lawsuit

A US judge accorded class action status to a lawsuit that alleges broad conspiracy among major Silicon Valley companies to suppress employee compensation by not poaching each other's employees, a court filing showed.

By winning the class certification, the plaintiffs would have more leverage to extract larger financial settlements than if they were to sue individually.

In 2011, five software engineers sued Adobe Systems, Intel, Apple and Google among others over their hiring practices, alleging that the Silicon Valley companies entered into an "overarching conspiracy" to suppress employee compensation to artificially low levels.

The defendants were accused of violating the Sherman Act and Clayton Act antitrust laws by conspiring to eliminate competition for labour, depriving workers of job mobility and hundreds of millions of dollars in compensation.

The case has been closely watched in the Silicon Valley, and much of it has been built on email exchanges between top executives, including the late Apple Chief Executive Steve Jobs and former Google Chief Executive Eric Schmidt.

Judge Lucy Koh in San Jose, California, in a ruling made available on Thursday, also certified the proposed class of technical employees, which includes software and hardware engineers, component designers, application developers, among others.

The plaintiffs believe this proposed class includes more than 50,000 people, according to the filing.

In their original complaint, the plaintiffs sought certification of an "All Employee" class, which included every salaried employee throughout the United States who worked for the defendant companies between 2005 and 2009, estimated to be more than 100,000.

The plaintiffs limited their class action group after Judge Koh in April said they have yet to show enough in common among the proposed class members to allow them to sue together.

The case is In re: High-Tech Employee Antitrust Litigation, Case No. 11-02509, U.S. District Court, Northern District of California.

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