US district court okays employee lawsuit against tech firms

US district court judge Lucy Koh yesterday rejected a request for summary judgment by defendant tech firms in a lawsuit filed against them by their employees, CNET claims it had learned, clearing the way for a trial.

The class-action lawsuit accused the companies of a conspiracy to eliminate competitive hiring and keeping wages artificially low.

The group comprises 64,600 engineers, designers, quality analysts, artists, editors, and system administrators employed by one of seven technology firms between 2005 and 2010.

The  companies stand accused of conspiring to eliminate competitive hiring and keeping wages artificially low.

The lawsuit names seven companies as defendants including Intel, Intuit, Lucasfilm, and Pixar.

According to publicly available documents,  court documents made it clear that executives at the highest levels of leadership at each company at least knew about the practice and were actively involved, in the implementation of the non-compete agreements.

While Pixar and Lucasfilm had already agreed to settle with their affected employees for $9 million, Intuit had agreed to pay $11 million.

The action affects around 8 per cent of the plaintiffs.

Scheduled to commence in late May, the trial was likely to run through five weeks and by end of the summer, how Silicon Valley did business could be altered forever.

Tech workers sued the companies alleging they conspired to avoid competing for each other's employees in order to avert a salary war. Trial is scheduled to begin in May.

Apple, Google, Intel and Adobe had asked for a judgment in their favour without a trial, arguing that any no-hire agreements between the companies were reached independently, and did not form part of an overarching conspiracy.

Koh in San Jose, California, however, rejecting their argument said, the agreements were entered into and enforced by a small group of intertwining high level executives, which bolstered the inference that the agreements were not independent.

Reuters quoted an Intel spokesman as saying that the company was studying the ruling.

The case started in 2011 with the accusations of five software engineers that Apple, Google, Adobe Systems Inc, Intel Corp and others, acting in concert were suppressing pay by agreeing not to recruit or hire each other's employees.

The defendants stand accused of violating the Sherman Act and Clayton Act antitrust laws by conspiring to eliminate competition for labour, depriving workers of job mobility and hundreds of millions of dollars in compensation.