High-Tech Employee Antitrust Litigation Cases and Trends

High-tech employee antitrust litigation cases have been on the rise in recent years, with several high-profile cases making headlines.

The US Department of Justice (DOJ) has been actively investigating and prosecuting antitrust cases involving tech companies, with a focus on employee poaching and no-poach agreements.

In 2020, the DOJ charged Google with violating antitrust laws by entering into agreements with other companies to not hire their employees.

Companies in the high-tech industry are at risk of being sued if they engage in anticompetitive practices, such as limiting employee mobility or sharing sensitive information.

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High-tech companies like Google, Apple, and Adobe allegedly had agreements not to cold call each other's employees, which is known as a "no cold call" agreement.

These agreements were negotiated between senior executives and were not limited by geography, job function, product group, or time period.

Agreements also existed to provide notification when making an offer to another company's employee without their knowledge or consent, and to not counteroffer above the initial offer.

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The companies involved in these agreements included Apple and Google, Apple and Adobe, Apple and Pixar, Google and Intel, Google and Intuit, and Lucasfilm and Pixar.

Over 64,000 employees of these companies were affected by these agreements, which restricted their ability to obtain career advancement and higher salaries.

The employees argued that these agreements limited their access to better job opportunities and competitively important information.

The companies eventually reached settlements totaling $435 million in 2015, with Google, Apple, Adobe, and Intel agreeing to $415 million and Intuit, Lucasfilm, and Pixar agreeing to $20 million.

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In 2010, the US Department of Justice Antitrust Division filed a complaint against Adobe, Apple, Google, Intel, Intuit, and Pixar, alleging violations of Section 1 of the Sherman Act.

The complaint alleged that these companies had entered into "facially anticompetitive" agreements to prevent the recruitment of each other's employees.

The Department of Justice alleged that these agreements "eliminated a significant form of competition" and "disrupted the normal price-setting mechanisms" in the labor setting.

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A similar complaint was filed against Lucasfilm in December 2010, with a similar settlement agreement reached in December of the same year.

A final judgment enforcing the settlement was entered by the court on March 17, 2011.

The settlement agreement prohibited the companies from entering into any agreement to refrain from soliciting or recruiting employees of the other companies for a period of five years, with the possibility of extension by the court.

The settlement did not provide any compensation for employees affected by the alleged agreements.

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The lawsuit was filed in 2011 by a former Lucasfilm software engineer, alleging that seven major tech companies conspired to maintain low salaries by agreeing not to poach each other's employees.

The complaint was eventually combined into a single class action suit in the United States District Court for the Northern District of California, certified by the Court in 2013.

Over 64,000 employees worked for the seven companies between 2005 and 2010, and they were the ones who brought the suit against their employers.

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The companies involved were Google, Apple, Adobe Systems, Intel Corporation, Intuit Inc., Lucasfilm, Ltd., and Pixar.

A similar but separate suit was filed against Lucasfilm on December 21, 2010, alleging similar "no cold call" agreements.

The Department of Justice Antitrust Division filed a complaint in the US District Court for the District of Columbia on September 24, 2010, alleging violations of Section 1 of the Sherman Act.

A final judgment enforcing the settlement was entered by the court on March 17, 2011, which prohibited the companies from entering into agreements to refrain from soliciting or recruiting employees of other companies.

The companies agreed to a broader prohibition against attempting to enter into, entering into, maintaining or enforcing any agreement with any other person to refrain from soliciting, cold calling, recruiting, or otherwise competing for employees of the other person, for a period of five years.

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The N.D. Cal. District Court has played a significant role in high-tech employee antitrust litigation, particularly in the case of In re High-Tech Employee Antitrust Litigation, which was filed in 2014.

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This case involved allegations of no-poaching agreements among tech companies, including Apple, Google, Intel, and Adobe.

The N.D. Cal. District Court initially certified a class of over 64,000 plaintiffs, who claimed they were affected by the no-poaching agreements.

The court's decision to certify the class was based on the fact that the plaintiffs were all employees of the defendant companies and were similarly situated.

In 2018, the court approved a $324.5 million settlement in the case, which was one of the largest class action settlements in history.

The settlement provided for payments to class members who were affected by the no-poaching agreements.

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