Andy Dean - Fotolia
More than three years after a judge in California rejected attempts by Apple, Google, Intel, and Adobe to dismiss a class action lawsuit that they conspired not to poach each other’s staff, the companies have reached a $415m settlement to end the suit.
US District Judge Lucy Koh, who rejected the attempt to dismiss the suit in 2012, presided over the settlement earlier this month (2 September). It comes after she rejected the companies’ first offer of $325m in August because it was “too low”, a decision which they appealed.
This isn’t the first time these four companies have been caught up in allegations of an anti-poaching pact. Back in 2010, they reached a settlement with the Department of Justice in a separate case. The settlement included a clause to “prohibit the companies from entering, maintaining or enforcing any agreement that in any way prevents any person from soliciting, cold calling, recruiting, or otherwise competing for employees. The companies will also implement compliance measures tailored to these practices”.
Those measures were supposed to be in place for five years. Strange then that the accusations of an anti-poaching pact between the same companies which have just been settled emerged a year after the DoJ agreement.
As I mentioned back in April 2012 when Judge Koh refused to dismiss the suit, it’s a bit rich for large scale businesses to place limits on the amount of money they are prepared to pay for potential employees by restricting their potential for movement to other companies. Besides, any scheme designed to keep employees’ salaries down by companies colluding in not poaching staff from each other sounds a little bit like an inverted 21st century version of the closed shop.
The settlement of $415m affects more than 64,000 people who previously worked or are still working for the four companies. Anyone with a calculator can work out that the average settlement equates to roughly $6,484. After the lawyers take their cut, the figure falls to around $5,770.
Call me a cynic, but despite the protestations of the companies involved, I think you could argue that’s money well spent if you take into account the recruitment and training costs associated with replacing a member of staff poached by a rival. Not to mention the disruption costs in the interim between losing an employee and finding a replacement.
Admittedly, not all 64,466 employees affected are likely to have been poached by one of the other companies in the time period. But $6,484 insurance per employee over the space of five years for the peace of mind of knowing one of your rivals won’t try and poach them might not be too terrible a price to pay either.