Following the $324 million settlement of the employee wage conspiracy lawsuit in 2011 that involved Google, Apple, Intel and Adobe, four of the biggest Silicon Valley corporations, new emails concerning the case have revealed that in November 2007, Google policy’s was to counter offers made by Facebook to its employees within an hour. Former Google CEO Eric Schmidt has confirmed in emails that the policy had existed only for 24 hours before it was leaked outside the executive management group’s emailing list. Schmidt’s anger was obvious: “Since I announced our 1 hour policy exactly 24 hours ago we should be embarrassed and disgusted by this leak.”
The lawsuit concerning Google, Apple, Intel and Adobe was about current and former employees accusing their employers of agreeing not to poach each other’s workers in an attempt to limit playing against each other with the goal of raising salaries. Although US District Judge Lucy Koh has yet to approve the settlement, both sides have agreed to settle the case for a sum of $324 million. The disgruntled employees sought an initial $3 billion, which could have tripled under current antitrust statutes, if the trial had begun. After a motion from Google in an attempt to seal incriminating emails, Koh made the emails public.
Judge Koh has questioned the fairness of the settlement in a June hearing. Some of the plaintiffs have rejected the amount and have hired attorneys to argue against the offered sum.
In one of the emails released this Friday, it is revealed that Google directors Paul Otellini who serves as Intel CEO and venture capitalist John Doerr have made the suggestion to Google cofounders Sergey Brin and Larry Page to approach Facebook workers on an one-on-one basis with the effort of recruiting them.
“Paul/John asked who was reaching out to the target Facebookers,” Prasad Setty, Google’s vice president of compensation, wrote to several Google executives on April 19, 2010. “They suggested that we have Larry/Sergey and Eng execs reach out rather than the Staffing leads.”
Shannon Deegan, a Google security operations director cautioned against this, saying that “I don’t agree that we should be asking Larry and Sergey to reach out to Facebookers, that will quickly be leaked and I believe [it] won’t look great.”
No evidence has been found to suggest that either Page or Brin have done such a thing.
The newly released evidence also points to the fact that Google staffing employees had personally confronted Facebook recruiters and cautioned them about poaching current employees. In March 2008, Arnnon Geshuri, Google staffing director writes “Even though it was an open event, we approached the recruiters at the time and … gave them a warning to (sic) we would be watching them.”
Intel, Facebook and John Doerr could not be reached. Google declined to comment on the matter.
Judge Lucy Koh is expected to rule on the proposed settlement at any time.
The 2011 case had caused wide coverage in the media because of its high-profile figure involvement and the potentially high damages award. It offered a unique glimpse into the lives and workings of the Silicon Valley elite. The case was in most part based on emails that circulated between Apple’s late co-founder Steve Jobs, former Google CEO Eric Schmidt and other big name players from Adobe and Intel. The conspiracy was hatched in order to avoid employee poaching which in turn would have raised salaries for workers across the whole tech sector.
Court documents show an email exchange where one incident is described when a Google recruiter requested an Apple employee. Schmidt told Jobs by email that the recruiter would be fired for this. Jobs had forwarded Schmidt’s mail to a top Apple human resources executives appending a smiley face.
In another exchange, we find out that Schmidt, now the company’s executive chairman, advises discretion after a Google human resources director asks him to share its no-cold call agreement with other competitors.
According to a court filing, the HR director said “Schmidt responded that he preferred it be shared ‘verbally, since I don’t want to create a paper trail over which we can be sued later?'”
The defendants had acknowledged entering into some no-hire agreements but countered the allegations that they had “hatched a conspiracy to drive wages down”. Adding to this, they claimed that employees should not be able to sue as a group.