By Jeff Elder
Top Google Inc. executives won't have to explain to a jury why
emails were sent to an irate Steve Jobs at Apple Inc. promising not
to recruit his employees.
Four big Silicon Valley technology companies agreed Thursday to
settle a lawsuit in which 64,000 employees accused them of
conspiring between 2005 and 2009 not to recruit each other's
workers, thereby depressing wages. Terms of the settlement
involving Apple, Google, Intel Corp., and Adobe Systems Inc.
weren't immediately released, but a source close to the case said
the settlement price was around $325 million.
During pretrial proceedings in the class-action antitrust case,
emails from top executives including the late Mr. Jobs, Google
co-founder Sergey Brin and then-CEO Eric Schmidt surfaced, showing
the executives conferred on hiring plans, sometimes through
intermediaries. An attorney for the plaintiffs said questioning the
executives before a jury would have been probable.
The defendants recently filed motions seeking to exclude
evidence--including testimony that made Mr. Jobs appear to be a
"bully."
"Steve being agitated was not unusual," Mr. Brin testified in a
deposition, discussing Mr. Jobs's phone calls to Google executives
about not "poaching" workers. Spokespeople for the defendants said
that avoiding that kind of testimony and having executives appear
on the witness stand made a settlement attractive.
"We are settling this matter to avoid the risks of litigation,"
said Chuck Mulloy of Intel. "We still deny violating any laws or
obligations to plaintiffs."
An Adobe spokeswoman said in a statement, "We have elected to
settle this matter in order to avoid the uncertainties, cost and
distraction of litigation." Apple and Google declined to
comment.
"We're pleased with the results," said Kelly M. Dermody, a
lawyer for the plaintiffs at Lieff Cabraser Heimann & Bernstein
LLP, who said attorneys "have had their heads down working
furiously on this for months." Nineteen dark-suited attorneys for
both sides crowded a pretrial conference in March.
"I am pleased with the result, and it will serve the class
well," said Mark Fichtner, one of the named plaintiffs and a former
Intel software engineer. The other four named plaintiffs in the
case, tech workers representing the class of workers at the
companies,couldn't be reached for comment.
The employees had been seeking $3 billion in damages. Under
antitrust rules, that could have been tripled to $9 billion.
Thursday's settlement follows settlements reached last year with
Lucasfilm Ltd., Pixar, and Intuit Inc. for a combined $20
million.
The civil case followed a 2010 Justice Department case on the
same matter. It had been set to begin May 27 before U.S. District
Judge Lucy Koh in San Jose, Calif.
The case showed how an inner circle of Silicon Valley executives
communicated during a period when the interoperability of
companies' products was often discussed. Emails between the
executives made compelling reading in Silicon Valley and
embarrassed the executives and their companies.
At one point, Mr. Schmidt emailed another Google executive to
say they should only confer on agreements not to recruit from other
companies "verbally, since I don't want to create a paper trail
over which we can be sued later."
Recruiting from competitors in the industry is now common,
according to a 2013 online survey of some 3,000 technology
executives conducted by Polachi Access Executive Search. It found
that 51% of those polled said recruiting talent from competition is
expected.
Write to Jeff Elder at jeff.elder@wsj.com
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