US judge allows tech 'poaching' suit to proceed

April 19, 2012

A US judge has given a green light to a lawsuit charging Apple, Google, Pixar and other technology-driven firms with colluding to keep salaries in check by agreeing not to poach one another's software engineers.

District Court Judge Lucy Koh, in a decision released late Wednesday, rejected motions to dismiss a class-action lawsuit charging that high-tech companies in the and San Francisco areas conspired on "Do Not Call" lists to keep talent tethered.

The list of defendants includes , Pixar, Apple, , Intel, Intuit, and Adobe Systems, alleged to have participated in the scheme to refrain from hiring each other's employees.

Koh noted in her ruling that the suit was based on Department of Justice antitrust investigations that ended in 2010 with agreeing to change their ways without admitting any wrongdoing.

The DOJ concluded that "facially anticompetitive" agreements were made that "eliminated a significant form of competition" to the detriment of workers "who were likely deprived of competitively important information and access to better job opportunities," according to court documents.

Agreements not to woo other companies' workers could prevent people from advancing careers and eased market pressure on employers to improve compensation overall, Koh reasoned.

"While these allegations concerning the labor market effects of cold calling remain to be proven, the court presumes these factual allegations to be true for the purposes of ruling on a motion to dismiss," the judge wrote.

"It is plausible to infer that even a single bilateral (do-not-call) agreement would have the ripple effect of depressing the mobility and compensation of employees of companies that are not direct parties to the agreement."

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