Lawsuit claims Apple, Intel and others are fixing employee pay

Are a bunch of tech companies working together to fix employee pay? That's what a new class action lawsuit claims. CNet reports that the lawsuit, filed on Wednesday in the California Superior Court in Alameda County, claims that Apple, Intel, Google, Pixar, Lucasfilm, Adobe and Intuit have violated anti-trust laws to fix employee pay along with working together to set up "no solicitation" deals.

The lawsuit's plaintiff is Siddharth Hariharan, a former employee at Lucasfilm. Hariharan claims that the above listed companies have cut deals to not actively recruit team members from each other. He also claims that the companies made deals to "provide notification when making an offer to another's employee (without the knowledge or consent of that employee)". Finally, the lawsuit claims that the companies named as defendants created "agreements to cap pay packages offered to prospective employees at the initial offer."

In a statement, Hariharan is quoted as saying;

It's disappointing that, while we were working hard to make terrific products that resulted in enormous profits for Lucasfilm, senior executives of the company cut deals with other premiere high tech companies to eliminate competition and cap pay for skilled employees."

The lawsuit is seeking damages including lost compensation for employees at the involved company between January 1, 2005 and January 1, 2010. The US Department of Justice started an anti-trust investigation of the companies in 2009 but that was settled in 2010 with the companies all agreeing not to enter into any "no-cold-call agreements" for their employees. So far none of the companies have commented on this newest lawsuit.

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21 Comments

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Its amazing how people cant see that companies colluding and fixing wages to keep them low is not healthy for a free market. Its exactly like price fixing. Its wrong and illegal. Is there any morality left in business? Or are we just sheep?

Looks like people very often miss the point that the capitalist theory works well when no big companies come together and fix price/salary etc. That is the reason why they are illegal.

Uh, the title clearly states "Apple, Intel, and others". It's obvious that the article/lawsuit is not 100% directed at Apple. And you can't have every single company in the lawsuit in the title, because then it wouldn't read well and it would be too long. What more do you want?

Um...we live in a capitalistic society. If a person accepts a certain salary offer, they have essentially stated that they are happy with the pay they will be receiving. I personally see an unofficial capping on initial salary packages as a good thing for the industry. Otherwise, we'd see salaries skyrocketing, similar to the decades leading up to the pre-recession era.

Elessar said,
Um...we live in a capitalistic society. If a person accepts a certain salary offer, they have essentially stated that they are happy with the pay they will be receiving. I personally see an unofficial capping on initial salary packages as a good thing for the industry. Otherwise, we'd see salaries skyrocketing, similar to the decades leading up to the pre-recession era.
It's exactly the same thing as if two companies secretly collude to set prices for consumer products. It's anti-competative and is a bad thing for the consumer. In this case the consumer is simply an employee instead of a product.

Elessar said,
Um...we live in a capitalistic society. If a person accepts a certain salary offer, they have essentially stated that they are happy with the pay they will be receiving. I personally see an unofficial capping on initial salary packages as a good thing for the industry. Otherwise, we'd see salaries skyrocketing, similar to the decades leading up to the pre-recession era.

Not if they use their heads, and how long does an employee have to stay by your "agreement" standard? If a worker has been with a company for five years that has very little turn over and they want something different, are they forced to remain there forever?

I find nothing at all wrong with the "no active recruiting" portion, but notifications and out and out agreements to not hire are bull.

weird. for some reason i thought companies had the right to decide what they wanted to pay someone. are there any decisions they are allowed to make for themselves or is everything just government ran these days

ILikeTobacco said,
weird. for some reason i thought companies had the right to decide what they wanted to pay someone. are there any decisions they are allowed to make for themselves or is everything just government ran these days

its to stop the high tech companies paying employees $10/hr, if all high tech companies did this they would be forced to take a low wage or would have to get a different type of job. Stopping employees from moving to rival companies isn't right either, you could be stuck in MS never getting a raise or a promotion and never be allowed to move to google for a better position or wage.

ILikeTobacco said,
weird. for some reason i thought companies had the right to decide what they wanted to pay someone. are there any decisions they are allowed to make for themselves or is everything just government ran these days

I think you are seeing this wrong. The issue is not what the companies pay to their employees, is having cut deals with other employers to prevent that other employers offer them better wages.

sviola said,

I think you are seeing this wrong. The issue is not what the companies pay to their employees, is having cut deals with other employers to prevent that other employers offer them better wages.


Probably because all i see is the government telling companies how much to pay their employees. Then people wonder why all the positions are being outsourced.

sviola said,

I think you are seeing this wrong. The issue is not what the companies pay to their employees, is having cut deals with other employers to prevent that other employers offer them better wages.

No, they are directly related...if you can't go to another company because of these agreements, then the company you are with can cap their own pay scales(and so can the company on the other end).

If every tech company agrees not to poach, then where do you go to get a better deal if your company cuts out bonuses or pay raises?

And to the OP, they can...what they cannot do is get with other companies and collude to lock workers into a veritable slave labor work force.

ILikeTobacco said,

Probably because all i see is the government telling companies how much to pay their employees. Then people wonder why all the positions are being outsourced.

Let me ask, if your actual monetary work in your capability was $75K per year, would you want you pay capped at $50K? And if you work for one company making a certain amount, unless it is teh exact same job don't you expect to get paid exactly the same or more?

These deals cap the apy and hurts if you want to leave one company for another.
Yet some crazed lunatic above said, companies should be allowed to cap pay? Not if they are capping it at or below what you were already making.

Remember these corps are making money off YOUR capability. Capping your pay insures you dont get a nic e fair chick of the pay. And that is bad. Think of it this way. Suppose you are the only developer for a product and they pay you $100K per year. Yet they make 50B from it...wouldn't you be a lil hurt?

TechieXP said,

Let me ask, if your actual monetary work in your capability was $75K per year, would you want you pay capped at $50K? And if you work for one company making a certain amount, unless it is teh exact same job don't you expect to get paid exactly the same or more?

These deals cap the apy and hurts if you want to leave one company for another.
Yet some crazed lunatic above said, companies should be allowed to cap pay? Not if they are capping it at or below what you were already making.

Remember these corps are making money off YOUR capability. Capping your pay insures you dont get a nic e fair chick of the pay. And that is bad. Think of it this way. Suppose you are the only developer for a product and they pay you $100K per year. Yet they make 50B from it...wouldn't you be a lil hurt?

The team i work with get a combined income of about $150,000 a year. The money we save our company is around the $1mil mark. I only get paid 40k a year for a job that pays 100k if i were to move 100 miles north of here. If my job were to be outsourced, it would be worth less than $20,000 in another country. It's life. Those aren't the only companies on the planet. Go work somewhere else other those those companies. Problem solved. If a company cannot choose what to pay its employees, that are voluntary employees at that, why not just make every company government owned.

ILikeTobacco said,

Probably because all i see is the government telling companies how much to pay their employees. Then people wonder why all the positions are being outsourced.

Then you need to see differently. For a start what has the lawsuit of a single former employee of Lucasfilm got to do with the government? Also nobody is telling companies how much to pay their employees. The issue at hand is companies colluding together to fix their wages at a similar level to make it less likely that employees would want to leave and move to another one.