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James Dohnert

Judge Allows 'No Poaching' Lawsuit Against Google to Proceed

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Google logo A California judge has denied a motion to dismiss a class action lawsuit from employees claiming that a group of high profile tech companies, including Google and Apple, conspired in a "no poaching" deal.

The defendants, which also include Intel, Adobe, Intuit, Lucasfilm and Pixar, have been accused of conspiring to limit worker salaries and mobility by agreeing not to pursue each others' active employees.

Five former employees who are suing the group for violating claims brought under the Sherman Antitrust Law and The Cartwright Act. The tech companies had hoped to get the case dismissed but where refused on grounds of plausible interference.

"The fact that all six identical bilateral agreements were reached in secrecy among seven defendants in a span of two years suggests that these agreements resulted from collusion, and not from coincidence," Judge Lucy Koh was quoted as saying by Reuters.

The agreements mentioned in the suit involve the accused companies' management agreeing to not hire key staff from competitors and to limit pay awards for new employees. Former LucasArts software engineer, Siddharth Hariharan, and four others attest that these 'no solicitation' agreements prevented them from earning higher wages.

Two years ago, the U.S. Department of Justice investigated claims that Google's had "no poach" deals with Apple, Intuit, and Intel. The DOJ agreed to an undisclosed settlement with the seven companies for anti-competitive practices. The DOJ case and the pending class action lawsuit are separate cases.

Following the 2010 settlement, Google addressed "cold calling" in a blog post:

In order to maintain a good working relationship with these companies, in 2005 we decided not to "cold call" employees at a few of our partner companies. Our policy only impacted cold calling, and we continued to recruit from these companies through LinkedIn, job fairs, employee referrals, or when candidates approached Google directly. In fact, we hired hundreds of employees from the companies involved during this time period.

While there's no evidence that our policy hindered hiring or affected wages, we abandoned our "no cold calling" policy in late 2009 once the Justice Department raised concerns, and are happy to continue with this approach as part of this settlement.

In February, a 2007 email from former Apple CEO Steve Jobs to Google CEO Eric Schmidt was revealed. In it, Jobs wrote to ask Google to stop recruiting Apple employees, writing, "I would be very pleased if your recruiting department would stop doing this." Allegedly, Schmidt did as he was asked.

This article was originally published on V3.


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