Microsoft sued as lawsuits over employee no-poach deal mount

San Jose Federal Courthouse
Pictured: San Jose Federal Courthouse Source: Martyn Williams, IDGNS

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22 October 2014 | 0

A court filing in May last year has attracted more class action lawsuits, alleging secret no-poaching deals among tech companies to keep salaries low.

Oracle, Microsoft and Ask.com are facing suits alleging that they conspired to restrict hiring of staff. The suits appear to refer to a memo which names a large number of companies that allegedly had special arrangements with Google to prevent poaching of staff.

The document was filed as an exhibit on 17 May 2013 in another class action suit in the US District Court for the Northern District of California, San Jose division over hiring practices. The tech workers who filed that suit alleged that Google, Apple, Intel, Adobe Systems, Intuit, Lucasfilm and Pixar put each other’s employees off-limits to other companies by introducing measures such as ‘do not cold call’ lists.

The seven tech companies had earlier settled similar charges in 2010 with the US Department of Justice while admitting no wrongdoing, but agreed not to ban cold calling and enter into any agreements that prevent competition for employees.

Google, Apple, Adobe and Intel appealed in September District Judge Lucy Koh’s rejection of a proposed settlement of $324.5 million with the tech workers, which she found was too low. Intuit, Lucasfilm and Pixar had previously settled for about $20 million.

The former employees filing lawsuits against Microsoft, Ask.com and Oracle have asked that the case be assigned to Judge Koh as there were similarities with the case against Google, Apple and others.

A key defense the companies may adopt is that the DoJ did not see it fit to prosecute them before 2010. “Oracle was deliberately excluded from all prior litigation filed in this matter because all the parties investigating the issue concluded there was absolutely no evidence that Oracle was involved,” Oracle spokeswoman Deborah Hellinger wrote in an e-mail after the suit against the company was filed.

The suit against Microsoft filed by former employees Deserae Ryan and Trent Rau charges, among other things, that Microsoft and other companies entered into anti-solicitation and restricted hiring agreements without the consent or knowledge of its workers. The plaintiffs said that the agreements that involved Microsoft were not disclosed publicly until the filing of 17 May last year.

John Ribeiro, IDG News Service

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