Apple, Google Go On Trial For Wage Fixing On May 27 148
theodp writes: "PandoDaily's Mark Ames reports that U.S. District Judge Lucy Koh has denied the final attempt by Apple, Google, Intel, and Adobe to have the class action lawsuit over hiring collusion practices tossed. The wage fixing trial is slated to begin on May 27. 'It's clearly in the defendants' interests to have this case shut down before more damaging revelations come out,' writes Ames. (Pixar, Intuit and LucasFilm have already settled.) The wage fixing cartel, which allegedly involved dozens of companies and affected one million employees, also reportedly affected innovation. 'One the most interesting misconceptions I've heard about the "Techtopus" conspiracy,' writes Ames of Google's agreement to cancel plans for an engineering center in Paris after Jobs expressed disapproval, 'is that, while these secret deals to fix recruiting were bad (and illegal), they were also needed to protect innovation by keeping teams together while avoiding spiraling costs.' Ames adds, 'In a field as critical and competitive as smartphones, Google's R&D strategy was being dictated, not by the company's board, or by its shareholders, but by a desire not to anger the CEO of a rival company.'"
This was nothing but a union (Score:3)
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If this was a union, wages would have risen, not been artificially lowered.
The CEOs got raises, didn't they?
They artificially reduced labor market competition
See what I mean?
they inhibited the exchange of fresh ideas
You make my point beautifully.
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I am just simple. (Score:5, Interesting)
Re:I am just simple. (Score:4, Insightful)
Obviously, they thought they were above the law.
They might be right. Judge Koh has declined to dismiss the case, but there will still be a trial, and after that, two rounds of appeals. They might get away with it.
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Obviously, they thought they were above the law.
Yes, thats exactly what they ruled in court.
Wait, this hasnt gone to trial yet? Maybe they should have just asked you whether the parties are guilty or not, since you seem to have it figured out.
After such nonsense as the Duke Lacrosse trial or the various "hes a rapist oh wait nevermind" cases where someone's life is ruined by a false accusation, you'd think people would learn to wait until AFTER the trial to break out the pitchforks. But then again you cant ever estimate just how knee-jerk internet post
Re: I am just simple. (Score:1)
Wait, so what was http://www.justice.gov/atr/public/press_releases/2010/262648.htm ?
Go away, corporatist shill.
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You're EXACTLY right. Im simultaneously shilling for Apple, Microsoft, and Google.
Or maybe, not knowing all the facts, not knowing whether anti-poaching agreements are legal, and not knowing whether the emails referenced in the article are legit, Id rather wait to see if this is complete BS (no stranger to slashdot) or whether theres any substance here. If you want to blindly trust every headline you come across on slashdot, go right ahead, just dont be surprised when you end up with a remarkably wacky wo
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Apparently being a successful company is a bad thing these days. We should just tax them all at 80% tax rate like France, that'll teach them.
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you can tax them at whatever rate you like - they'll pay roughly 1% as a token gesture regardless.
they're successful companies for a good reason, and paying a share of the tax burden that's being paid by you and me isn't it.
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They are above the law. If you are just an average citizen, and you do something illegal, the militarized police will come and break down your door, shoot your pets, and throw you in jail. After selling everything you own worth anything to try and save your sorry ass, you'll be found guilty, then sent to prison, where you will very likely be raped and beaten. In the process, you will lose your job, you will lose your home, most likely any material possessions
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When hopelessness permeates everyone and everywhere, violence will become the only option.
Re:I am just simple. (Score:5, Insightful)
Have you ever seen the penalty for something like this cost a company more than they saved by breaking the law in the first place? They've already won.
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In terms of dollars? Sure.
In terms of talent? Nope.
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Not a company but Birmingham Council ended up paying out a lot more than they saved by paying women less than men for decades. I'm pretty sure that even in the US they would have to pay out what they saved to the employees who were affected, although calculating that amount would be very difficult.
Or do you mean that they won't even have to make the legally mandated restitution?
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Yes. This has been going on for almost 2 decades. They have already reaped the reward of being able to keep their employees together without having to pay them lots of $ or stock. What they end up paying now will be small compared to what they have already benefitted.
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But is it really worth the virtually inevitable lawsuit for a company as successful as the defendants in this case to cheat the backbone of their operations out of a fair wage...
It's not about "fair wage" in most cases, it's about opportunity to work on projects these talented engineers want to work on.
In most cases, the money is something but not the big draw.
These folks bail from Google to Apple, Apple to Google, to work on stuff they want to work on.
Google and Apple (and Intel) are not in a wage fight, they all pay very well.
Finally! (Score:5, Funny)
Apple, Google, Intel and Adobe, working together at last!
Oh wait...
Google's Firing of a Recruiter Made Jobs Smile(y) (Score:5, Interesting)
After Google CEO Eric Schmidt informed Steve Jobs that a Google recruiter had been terminated for not-getting-with-the-do-not-poach-program, Jobs responded by e-mailing only an evil 'smiley' [pando.com] to Apple's head of HR.
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Jobs is dead :)
Re:Google's Firing of a Recruiter Made Jobs Smile( (Score:5, Insightful)
Actually, I think the smiley in that instance could be called evil because it referred to the firing of an employee of another company that he made happen. So, if I sent a knife to someone along with a letter telling them to stab you, and they then did it, then my package could be considered an evil package.
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Only Steve Jobs can send evil smileys ;)
Though if you know him and his email style, you know he never sends smileys except out of glee.
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Not by itself, you also need to look at the From: header.
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Really? :) now equals "evil smiley"?
Well what is an "evil" smile? It's a smile in an evil context.
Re:No proof so far (Score:5, Insightful)
Hasn't been any proof of any wrong doing so far. Anti-poach agreements aren't illegal or even unethical. Agreeing not to break the law by going after other companies employees is not a problem. If there was a no hire agreement it would be an issue but we've seen no evidence of that.
Actually, anti-poaching agreements ARE illegal in certain states. In particular, California, where many of these firms are based have specific laws that are supposed to avoid collusion like being alleged here.
Re: No proof so far (Score:5, Insightful)
Except that, as these companies make abundantly clear when you're hired, you are not in an employment contract. You are an at-will employee who can leave at any time and who can be terminated at any time for any or no reason. Companies like that because it lets them just fire people whenever they want, and these agreements are simply to let the company have all the advantages of having at-will employees without having to suffer any of the consequences of having at-will employees.
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They are 'at will' employees. The VPs and senior managers are likely under detail contracts but the people doing the actual work will be regular employees. Well paid but still employees that can be released at any moment (in most states.)
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> These aren't tech support jobs they're design and engineering teams
That certainly does not mean they are employees, and not contractors. I've often helped train such contractors, and helped them get their development concerns verified by an outside agency so that they're taken more seriously and actually addressed rather than lost in the "not invented here" distaste from headquarters based teams in their own company.
Re: No proof so far (Score:5, Insightful)
Perhaps the state in which you live permits indentured servitude, but California law restricts what employment terms can be enforced and leaving to join a competitor is an act that is protected under California law.
Aren't most of these Tech CEOs Dems? (Score:1)
While I lean towards the left, don't assume collusion isn't just as likely to happen among 'supposed' Democrats as it is among Republicans.
The real problem we have here is companies becoming bigger than god himself (in ego at least). And our inability as individuals or 'collective controllers of the government' to really rake the coals over their feet for acting as such.
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You are right about how racist start-ups are in silicon valley. They refuse to hire any employees that are not white
What??? Clearly you've never set foot inside a single silicon valley start-up.
They are predominantly "at will" employees. (Score:5, Informative)
No one at being recruited is at will. These aren't tech support jobs they're design and engineering teams. These folks have very detailed contracts. Your not working a new products without one.
You're quite wrong. Having worked on secret projects at both Apple and Google, the only thing you get to sign extra above and beyond your original employment agreement, which is primarily a non-disclosure agreement, is layered non-disclosure agreements.
It's actually quite funny, since they bring you an agreement with a project codename on it that you aren't allowed to discuss under your original agreement, and then after that NDA, you are now allowed to learn the codeword for the project you're going to be working on, and you sign an NDA for that project, too.
Very, very rarely you will be asked to sign a vendor or partner NDA, but if you're asked to do that, you are generally compensated for the signing, because it means not working in that area for another company for a couple of years, and the compensation is to pay you for foregoing the opportunity.
FYI, everyone below management director level, including line managers, are "at will", at least in Apple and Google in California, and it's likely the case elsewhere, since some of the work is considered by the Franchise Tax Board to take place in California, if you are managed from California, so California gets to collect income tax on it. The two "Distinguished Engineers" I know at Apple I've discussed it with are also "at will", rather than contract employees.
I'm not sure about the people at director level or above at Apple, or above directory level at Google, since, frankly, the topic has never come up in casual conversation, and generally people tend not to talk about their compensation anyway, unless you are a very close friend or family member.
Generally, both companies rely on options maturation (or RSU - Google calls them GSUs and ties them to performance) vesting schedules to act as "golden handcuffs", rather than contracts. You're generally not a high level contract employee without a parachute (silver or golden).
In case you are wondering, non-competes are also not legal in California, unless the competition occurs as side work during your employment at the company, and generally are not considered legally enforceable in the U.S., unless they continue to pay your salary (plus scaled increases based on past increases, if any were performance related) during the lockout period. You can thank my cousin for this, as he took his non-compete to the supreme court (and yes, they payed him to take the year off at his regular salary to prevent him from going to a competitor).
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In case you are wondering, non-competes are also not legal in California, unless the competition occurs as side work during your employment at the company, and generally are not considered legally enforceable in the U.S., unless they continue to pay your salary (plus scaled increases based on past increases, if any were performance related) during the lockout period. You can thank my cousin for this, as he took his non-compete to the supreme court (and yes, they payed him to take the year off at his regular
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Well, the obvious answer is "move to California"; California courts have invalidated out of state non-competes former employers in other states have attempted to enforce against workers in California.
Practically speaking, unless there's an arbitration clause or a venue clause in the non-compete that sticks it to Massachusetts, there's really very little the employer can do. The recent Atlantic Marine decision on the venu clause strengthens somewhat the requirement that it be part of the signed agreement at
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I call BS, I work on new products and I can leave any time.
Anybody who thinks this kind of collusion is innocent is (IMO) crazy. Ask your managers if they will work for less money?
Seriously, are you the same people who believe your career is over at 35 years old? Then you better make bank now. And if you don't believe it, then make bank anyway.
Re:No proof so far (Score:5, Interesting)
It all depends on how much lawyer you can afford. This agreement is "likely illegal" and definitely shady. I would say this classifies as a cartel [wikipedia.org] since 7 major tech companies are involved. An anti-poach agreement might be legal between two companies like Ford and GM, but not an seven. There are also possible federal anti-trust, anti-competition, anti-labor, and collusion charges which could be brought as well, but that won't happen since none of these companies did anything nearly as (sic) horrible as Aaron Swartz [slashdot.org].
Re:No proof so far (Score:5, Insightful)
Re:No proof so far (Score:5, Informative)
You can also have employees sign non-compete agreements which limits their right to work for a competitor for X years. However, in California (where the movie industry lives) these agreements are NOT LEGAL. [wikipedia.org] Because of this, the tech giants had to find another way to limit employee mobility and this was it.
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Unethical is being under contract with a company and colluding with another one to violate it. If a NFL team talks to a contracted player without getting the other teams permission they are acting illegally.
Your implication that legality means ethical and illegality means unethical is dubious at best and dangerous and criminal at worst. I'm not sure why the NFL is our guideline for morals. Do we get their pay too?
Ethical or not partially depends what the contract says and the conditions when signing it. All contracts are not equal in value. Not all contracts are enforceable.
In an imaginary world where employees and employers had equal leverage and sat down and wrote their contracts from a to z together, with e
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Bringing ethics into it clouds the issue. Its not something we want in society, I think, so its probably easiest to leave it at that.
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The only aspect to "avoiding spiraling costs" would be with very skilled US staff who could move up between brands until wages matched the staff real value.
Smart new firms will find staff anywhere else. Older firms will be left with trapped staff worried about their wages and prospects vs been productive.
Guilds, serfdom and indentured workers have all be tried. If you cant keep staff, perhaps the best staff know next
Just the tip of the iceberg (Score:5, Interesting)
This is just the tip of the iceberg in Silicon Valley wage fixing, discriminatory hiring, and age/gender discrimination. I would like to see the tech workers walk away with some big bags of cash since most of these companies are paying federal/state taxes in the USA. At least when the employees get paid it will benefit their local countries, states, and communities by re-patrioting some cash through taxation.
To me this is just further proof that large companies can do whatever they want, ignore any laws they want, not pay taxes/wages, and ignore the "invisible hand of the market" [wikipedia.org] any time they wish. The lawsuit will probably be dismissed on Tuesday when the court opens, I am sure someone is writing the check as you read this.
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No, that was not the idea of the invisible hand. It's a nice straw man but it has nothing to do with what Adam Smith wrote.
The invisible hand is just a facile metaphor for how prices are set by supply and demand. Nothing more. It has nothing to do with regulated vs. unregulated markets. Moreover, nowhere in The Wealth of Nations does Smith ever say that the invisible hand will make everything work out for the best.
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/me claps using a single hand.
Come on now... (Score:3, Funny)
Of course they have to "work together" to fix wages.
If one decided to start paying their employees twice as much as the other, the other would lose all their employees to them. There need to be limits to that kind of thing, otherwise they will start fighting over wages, always increasing them to retain their employees until the day they can no longer compete and just decide to close up shop in the US and go for the cheaper Chinese labor.
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...always increasing them to retain their employees until the day they ... import loads of cheap 3rd world workers under the H1B program.....
oh wait!
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So subtle I wasn't sure if it was a joke or note. Well played, sir.
In fact that is how some companies seem to think. They see employees as commodity items. "We need an engineer with X qualifications/experience to do Y, and it doesn't matter if he is in India or our US office."
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Yes, but engineers are expensive, and these companies rely on thousands of them to design their products. If they don't collude to suppress engineering salaries then the only option left is to cut back on executive compensation, which is absolutely unacceptable.
Neccesary? (Score:5, Interesting)
Necessary to keep teams together? I don't think so. How about, maybe, paying well enough that people people aren't tempted to jump ship in the middle of a project? Or putting people under contract instead of having them be at-will employees? Sure you can't just fire them any time you want (unless you've got good cause, like failure to do their jobs), but you don't have to worry about losing them at any time either.
These hiring collusions aren't necessary to keep employees. They're only necessary to keep employees without the company doing anything to actually keep employees.
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> without the company doing anything to actually keep employees.
Well, no. A bit of board member or vice president back scratching, insider trading, and violating non-disclosure agreements about competitors of your "friends" is just the sort of day to day "entrepreneurial spirit" that corporate boards are known for. But none of that goes to the people who do the actual design or construction work. It goes to the board members and holders of voting stock, not the suckers with "stock options" that are alway
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Agreed, there are so many ways to retain employees without flagrantly breaking the law. I am amazed that more people in HR didn't speak up, they surely knew their marching orders were illegal.
Contracts, retention bonuses, stock options, and more could have all been employed to keep teams together. Arrogantly treating people as property was not necessary in the slightest.
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Necessary to keep teams together? I don't think so. How about, maybe, paying well enough that people people aren't tempted to jump ship in the middle of a project?
Eh....
The salaries and benefits they get are almost certainly out of proportion with the work they do. They are very well paid at Apple, Good, et all. All the tech sector is.
Ames' View Too Narrow (Score:5, Insightful)
while these secret deals to fix recruiting were bad (and illegal), they were also needed to protect innovation by keeping teams together while avoiding spiraling costs
Yes, needing to offer competitive wages to creative team members would have increased the cost of the individual project, but that need not affect the company's bottom line if it finds cost savings elsewhere, like in executive compensation.
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Both Apple and Google make billions in profit every year. They don't need to make cost savings, they are just being mean. Corporate profit motive and answering to shareholders corrupts people.
cost (Score:4, Insightful)
'is that, while these secret deals to fix recruiting were bad (and illegal), they were also needed to protect innovation by keeping teams together while avoiding spiraling costs.'
If you want to protect innovation, pay your programmers enough. If your product can't cover costs of paying a competitive salary, it doesn't deserve to be a product. Welcome to capitalism.
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But Americans want to be paid too much. We need more H1B Visa professionals who are willing to work for reasonable wages. The future of innovation is at stake, and we cannot let it be shackled to spoiled code monkeys who aren't willing to accept the same prevailing wages that are offered in China and India. If they want more money than that then they should climb further up the corporate ladder where compensation is more closely matched to the manager's contribution to the company.
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H1Bs are not paid "the same prevailing wages that are offered in China and India", since they actually work in US.
let's point the finger at the right people (Score:2)
So, let's see: Jobs is behaving like an a**hole, taking revenge on people leaving Apple and preventing them from getting new jobs. To do so, he threatens a smaller startup, which is what Google was at the time. Seems to me the culprit here is Jobs and Apple, and the victims are both his employees and Google.
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In 2006 Google wasn't exactly "a smaller startup".
They were part of this agreement because they got something out of it - same as Apple.
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Google may well have been bigger than Apple in 2006.
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Google had a high valuation, but it was much smaller in terms of employees and had few products. Apple was flying high, Jobs was highly respected and had a lot of power because Apple controlled several major platforms that were important to Google's success.
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So you're saying that the Google manager were obsequious and accommodating because... why exactly?
We all miss Groklaw (Score:5, Insightful)
May I say that we all miss Groklaw's insightful analysis, and very open access to, the core documents and analyses of these cases? If anyone on Slashdot knows PJ personally and can encourage her to accept the problem of email monitoring and return to her legal soapbox, she'd be welcomed. Groklaw's analyses of these cases, and PJ's careful attention to detail were welcome and instructive.
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I second that.
And I'm sure a LOT of others do too.
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Welcome to Corporatocracy. Which doesn't exist. Because conspiracy theories are always false. And this wage-fixing business is a conspiracy, right?
Government angry it was left out (Score:1, Insightful)
Settling (Score:1)
I assume this will reach class action status and settle, with a payout fifteen years from now of $15 (after lawyer's fees) per software engineer who worked in the Silicon Valley area during that time period.
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Punishing the businesses now will just make it harder for these companies to pay proper wages going forward, and it will cause greater economic harm to the rest of the country. The best thing workers can do now is to just put this whole mess behind them, show up to work, and do their jobs. Our nation depends on the success of these businesses to create jobs that would not exist otherwise. We should be thankful that Apple and Google made the difficult decisions that were necessary to keep good paying jobs
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Not sure if you're serious...
I'll just point out that Google and Apple cannot possibly have difficulty paying wages to their employees, even if their salaries rose a fair bit and both companies were forced to pay incremental back-salaries to employees current and former and punitive damages. Unless you're imagining that these agreements cut their salaries to a quarter of the "natural" rate or something like that. These aren't companies living on the edge. Their cash reserves alone are measured in billion
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> Punishing the businesses now will just make it harder for these companies to pay proper wages going forward
Possibly the stupidest comment I've ever read on Slashdot and that is saying something.
> The best thing workers can do now is to just put this whole mess behind them, show up to work, and do their
> jobs. Our nation depends on the success of these businesses
Tell you what, from now on, take 25% of every paycheck you get, and send it to Apple and Google. If you don't do that, you are a hypocrit
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Sorry, forget to end with a smiley :-). I was just parroting something I heard at a TEA Party rally.
Apple and Google have $250,000,000,000 banked (Score:5, Insightful)
> while these secret deals to fix recruiting were bad (and illegal), they were also
> needed to protect innovation by keeping teams together while avoiding
> spiraling costs.
That is bullshit. If an Apple employee has a job offer from Google for $20,000 more, then give the Apple employee a $25,000 raise if you need to keep the team together. Apple has $160 billion or something like that in the bank. They are giving dividends to shareholders whose stock holdings have gone up exponentially over the course of just a few years.
Wages have been flat for 30 years while productivity and corporate profits soared. There's no excuse at all for not paying employees.