No rummaging through the Cookie Monster's underpants! Google offers more money to prevent dirty washing being aired
via Flickr © Keith Williamson (CC BY 2.0)
There are nasty stains and smudges on their intimate apparel that some Silicon Valley companies don't want anyone to see and now Google, one of the companies that allegedly conspired to prevent the free movement of employees between members of a cartel that had agreed to impose a secret and illegal 'do not poach staff' 'non-solicitation' agreement between themselves, has agreed to increase the amount of compensation on offer to prevent the antitrust class action lawsuit reaching court and all those nasty little details being made public.
In essence, the basis of the class action suit, which has been grinding along since 2011, is that several big and powerful high-tech Californian companies, including Aple, Adobe, and Google conspired illegally together in a pact to stop employees from one company in the cartel from moving to work for another member company.
If there is anything that could be described as approaching the sacrosanct in the US model of modern capitalism it is the inalienable right of an individual to sell his or her labour to any company he or she likes if the individual involved believes the price and circumstance is right.
Moving from company to company and job to job for better money, benefits and conditions underpins the entire notion of a flexible and mobile workforce helping foster greater economic development for the nation by helping itself to prosper. It is what both oils the wheels of commerce and individual aspiration. It is an integral part of the The American Dream.
However, this is more the stuff of an American nightmare. The lawsuit claims that the companies deliberately, knowingly and with intent limited the job mobility of certain workers and, by doing so, kept salaries down and prevented individual choice and personal development.
After much humming and haa-ing and to-ing and fro-ing and with lots of "without prejudice" knobs and furbelows tacked on in the margins, the accused in the plaint, while not going so far as to front-up and admit any guilt or liability, magnanimously agreed jointly to offer US$324.5 million in settlement of the case.
That figure is chump change to the companies involved and is so derisory an amount that Lucy Koh, the US District Judge overseeing the case in San Jose, California, last year rejected it after just one of the plaintiffs rejected it as being "too low".
In her judgement the judge opined that a lot more monetary compensation should have been offered given the "compelling evidence" that the plaintiffs have against the companies and so now Google and its rich pals, having had another little conflab, are back and have upped the ante to the still rather niggardly sum of $415 million. This money will be split between at least 65,000 people.
The class action case, 'High-Tech Employee Antitrust Litigation, US District Court, Northern District of California 11-cv-2509', comprises some 65,000 plaintiffs who, as former employees of the companies cited in the litigation, claim Google et al formed an "interconnected web" of agreements to keep wages low by not hiring each other's workers in the years between 2005 and 2010.
The "compelling evidence" to which Judge Koh refers is contained in a series of email exchanges between the CEO of Apple, the late Steve Jobs, and Google CEO, Eric Schmidt, (who, at the time was, incredible as it seems now, also a member of the Apple board).
In the exchange Jobs emailed Scmidt and asked him to prevent Google apparatchiks further down the pecking order from recruiting Apple employees. On March 7, 2007, Jobs wrote, "I would be very pleased if your recruiting department would stop doing this."
Eric Schmidt was only too happy to oblige and forwarded the email with an addendum saying, "I believe we have a policy of no recruiting from Apple and this is a direct inbound request. Can you get this stopped and let me know why this is happening? I will need to send a response back to Apple quickly so please let me know as soon as you can."
A Google executive then fired the recruiter who had been trying to sign-up the Apple engineer in question and Google's 'staffing director' emailed back, "Please extend my apologies as appropriate to Steve Jobs this was an isolated incident."
When news of the cartel's machinations eventually leaked out, the US Department of Justice set up an investigation the end result of which was a monetary settlement and an agreement by the companies to stop fixing the market via their illegal restrictions on the employment and movement of staff.
Thereafter, and not unsurprisingly, the self-same companies then found themselves facing a class action civil lawsuit which drags on to this day.
Now that the amount of compensation has been raised some lawyers acting for the plaintiffs are pushing their clients to settle. As things stand the attorneys will get at least 25 per cent of the proceeds of the deal but if plaintiffs hold out for more there is a chance (a slim one admittedly) that the whole case could collapse leaving the the lawyers with nothing to show for years of work.
For the plaintiffs it is a gamble. They can petition the judge to reject the new offer on the grounds that it is still entirely inadequate giving the depth and breadth and reach of the conspiracy and hope to force Google, Apple and the rest of them to stump up a much more significant figure further down the line. Some US analysts are now saying that pecuniary sanction could be as high as $9 billion, a figure that would at least sting the likes of Apple and Google for a minute or so but more in terms of attendant bad press rather than a meaningful, hurtful raid on bulging corporate coffers.
If the latest deal is accepted, individual plaintiffs will eventually get about $1000 each in compensation. The lawyers will, as usual, make millions.