Joel Rosenblatt San Jose, California
EVIDENCE produced against Apple, Google and some Silicon Valley cohorts about an alleged conspiracy not to recruit each other’s employees has sparked new lawsuits claiming other tech and entertainment companies engage in the same anti-competitive conduct.
Pixar president Edwin Catmull acknowledged the use of such agreements when he was questioned by lawyers for thousands of employees who sued his company, along with Apple, Google and four others, in 2011.
Catmull said he was trying to help the industry survive by stopping hiring raids, remarks that triggered complaints in the last three months against animation studios in California.
Likewise, a Google document revealed in the case from three years ago – the search engine owner’s 2007 “Restricted Hiring” and “Do Not Cold Call” lists of the companies it agreed not to recruit from – has resurfaced as key evidence in complaints brought in the last two months against Oracle, Microsoft and IAC/InterActiveCorporation.
The new complaints come as Apple, Google, Intel and Adobe Systems face a trial over the original lawsuit in April with potential damages of $9 billion (R100bn) because they failed to win approval to settle the claims for $324.5 million.
The litigation was “mushrooming”, Orly Lobel, a law professor at the University of San Diego, said. “Once there’s a visible test case, you look around to see where else it’s happening, and the next cases are easier to put together.”
The Apple-Google case, in its novel application of traditional price-fixing claims to labour markets, was serving as a template for a new wave of group lawsuits, she said.
The newer cases are assigned to US District Judge Lucy H Koh, who issued a critical ruling last year allowing the original one to advance as a class action. In August she took the unusual step of rejecting the proposed settlement amount as too small, citing “ample evidence of an overarching conspiracy”.
The first new complaint was filed a month later, naming DreamWorks Animation, Walt Disney and three of its units and two Sony units as defendants. Employees alleged that Steve Jobs helped establish the animation industry no-poaching pact in his role as co-founder of Pixar.
The 64 000 workers covered by the original case include software and hardware engineers, programmers and other technical staff. The newer cases include managers and digital artists.
Following a US Justice Department investigation, Apple, Google, Intel, Adobe, Intuit and Pixar agreed in 2010 to end illegal fixing and suppression of compensation.
Walt Disney’s Pixar and Lucasfilm, which agreed along with Intuit to settle the 2011 case for $20m last year, are the only firms being sued again.
The alleged conspiracy by the animation companies dates back to the mid-1980s, when George Lucas sold his computer division to Jobs, who had left his position as Apple’s chief executive and started Pixar.
The animation companies contend the new lawsuits are “belated attempts to spin off fresh litigation from a Department of Justice investigation that began more than five years ago”, and never led to any government action against most of the employers being targeted, according to a court filing. – Bloomberg