Two of the biggest tech companies conspired to keep their worker’s wages low, according to a new report from Pandodaily. Both Steve Jobs and Eric Schmidt agreed not to recruit each other’s staff, shared wage information and threatened companies who tried to shake the boat. Sounds like a load of drama, I know, but the clandestine moves of Jobs and Schmidt have been chronicled and investigated by the Department of Justice as part of an antitrust investigation launched in 2010. Those findings became the basis of a class action lawsuit, brought by 100,000 tech workers who had their wages lowered. The lawsuit has been approved to go forward, and a jury date of May 27th has been set in San Jose, CA.
The story begins in 2005 when Bill Campbell, an Apple board member and senior advisor to Google sent an email to Steve Jobs to confirm that Mr. Schmidt “got directly involved and firmly stopped all efforts to recruit anyone from Apple.” Later on that same year, Schmidt told Sr VP for Business Operation Shona Brown that the deal needed to remain a secret, and to only communicate “verbally, since I don’t want to create a paper trail over which we can be sued later?” Yikes.
Jobs and Schmidt weren’t the only big boys playing the game, either. The suit alleges that Adobe, Intel, Intuit, Lusafilm and Pixar were conspiring with Apple and Google in a series of “gentleman’s agreements” a.k.a. verbal agreements that would keep the companies from trying to recruit each others employees.
“Between approximately 2005 and 2009, Defendants Adobe, Apple, Google, Intel, Intuit, Lucasfilm, and Pixar allegedly engaged in an “overarching conspiracy” to eliminate competition among Defendants for skilled labor. The conspiracy consisted of an interconnected web of express bilateral agreements among Defendants to abstain from actively soliciting each other’s employees.”
The companies listed above agreed not to actively recruit each other’s employees, and shared wage and data internally, and even fired recruiters for trying to poach workers from other companies.
It will be interesting to see how this class action lawsuit turns out. The meritocracy which the tech community holds in such high regard seems to be just smoke and mirrors. The full court documents follow below.