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Silicon Valley Workers May Pursue Salary-Fixing Lawsuit

First time accepted submitter amartha writes with news that a lawsuit alleging Silicon Valley companies of colluding to lower wages is going forward as a class action. From the article: "Roughly 60,000 Silicon Valley workers won clearance to pursue a lawsuit accusing Apple Inc, Google Inc, and others of conspiring to drive down pay by not poaching each other's staff, after a federal appeals court refused to let the defendants appeal a class certification order."

34 of 130 comments (clear)

  1. IANAL, but... by jddeluxe · · Score: 4, Interesting

    It might be difficult to prove the INTENT of the "no poaching" agreement was to suppress wages. Unless any of the defendants were stoopid enough to refer to such in emails or other discoverable documentation.

    1. Re:IANAL, but... by 0123456 · · Score: 3, Insightful

      How can it not suppress wages? Do you really think Joe Programmer will earn less if three other companies want to hire him, or if those three companies collude together to not hire each others' employees?

    2. Re:IANAL, but... by dkleinsc · · Score: 5, Insightful

      They have a demonstrably anti-competitive agreement between purchasers of a service to make each seller only able to deal with one of the purchasers, creating a monopsony. Textbook macro basically argues that the effect of a monopsony is that the only buyer in the market now has basically complete control of the terms of any agreement with the seller, because the seller's only option is to not sell his product.

      Another way of describing this: Imagine you work for Amazon. Without these agreements, you have these options:
      1. Accept a 3% raise to continue working at Amazon.
      2. Accept a 25% raise to go work for Google.
      3. Not work at all and be unemployed or at least accept a massive wage cut.

      With these agreements your options now are:
      1. Accept a 3% raise to continue working at Amazon.
      2. Not work at all and be unemployed or at least accept a massive wage cut.

      This is inherent in these kind of agreements. There's no need to prove intent.

      --
      I am officially gone from /. Long live http://www.soylentnews.com/
    3. Re:IANAL, but... by strimpster · · Score: 2
      Reading over the original judge's order to allow the antitrust lawsuit to continue, it seems that the DOJ gathered enough evidence to show that the actions from the companies were detrimental to the employees.

      After receiving documents produced by Defendants and interviewing witnesses, the DOJ concluded that Defendants reached “facially anticompetitive” agreements that “eliminated a significant form of competition . . . to the detriment of the affected employees who were likely deprived of competitively important information and access to better job opportunities.” DOJ Complaint against Adobe, et al. (“DOJ Adobe Compl.”), Harvey Decl. Ex. A, at 2, 14; DOJ Complaint against Lucasfilm (“DOJ Lucasfilm Compl.”), Harvey Decl. Ex. D, at 2, 15, 22; CAC

      112. The DOJ also determined that the agreements “were not ancillary to any legitimate collaboration,” “were much broader than reasonably necessary for the formation or implementation of any collaborative effort,” and “disrupted the normal price-setting mechanisms that apply in the labor setting.”

    4. Re:IANAL, but... by ranton · · Score: 4, Informative

      It might be difficult to prove the INTENT of the "no poaching" agreement was to suppress wages. Unless any of the defendants were stoopid enough to refer to such in emails or other discoverable documentation.

      What other purpose could "no poaching" agreements possibly have? Their only purpose is so a company does not have to pay a salary high enough and/or create a work environment good enough to keep the employee from leaving.

      --
      -- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
    5. Re:IANAL, but... by donscarletti · · Score: 2

      It might be difficult to prove the INTENT of the "no poaching" agreement was to suppress wages.

      The legal standard for civil cases is on the "preponderance of the evidence", i.e. the proposition is more likely to be true than not. If it transpires before the court that the intent of the "no poaching" agreement might have been promoting gentlemanly conduct in HR, might have been based on the belief that employees become more productive the longer they have been in a team, but probably was to drive down wages, then the judge must rule in favour of the plaintiff.

      Of course you cannot simply think of a hypothetical illegal reason for someone to have done something and sue them because it sounds likely. This is because, in this case the respondent will naturally testify that they did it for some particular reason and didn't do it to drive down wages, and sworn testimony does carry legal weight and it does take real evidence to refute it; but all it takes is a credible witness swearing that they were part of some wage collusion meeting, that they read a memo regarding the agreement's true purpose or they heard or read anything that refutes the intent given and unless their testimony can be refuted in turn, then it's really just down to who's story sounds the most credible.

      --
      When Argumentum ad Hominem falls short, try Argumentum ad Matrem
    6. Re:IANAL, but... by Bite+The+Pillow · · Score: 3, Informative

      The case evolves around a comment made by Appleâ(TM)s late-CEO Steve Jobs to Palmâ(TM)s CEO: âoeWe must do whatever we can to stop cold calling each otherâ(TM)s employees and other competitive recruiting efforts between the companies.â

      Copied directly from the article. No logic needed. No need to prove intent because It's right there in the comments at the core of the entire case.

      I do agree that these whiny millennials could do the normal thing and occasionally look for other options and therefore lost nothing, but the law does not look favorably on anticompetitive practice, so that statement is pretty much all they needed.

  2. Re:Collusion, in tech? by Anonymous Coward · · Score: 3, Insightful

    You're clearly wrong on this. You incorrectly had the word "tech" in that sentence, inaccurately limiting its scope.

  3. Re:Collusion, in tech? by i+kan+reed · · Score: 3, Insightful

    Hey, hey, that's not fair, large tech companies have also conspired to fuck over their customers and suppliers. We just have proof about employees.

    (I don't know why we call our economy free-market, when regular people don't get a chance to participate in a free way).

  4. Re:Collusion, in tech? by mjr167 · · Score: 4, Insightful

    No... the lawyers will get rich, the workers will get fired, and the company will continue business as usual.

  5. Re:Collusion, in tech? by Moryath · · Score: 4, Insightful

    Eventually.

    After years of appeals, attempts to bury the employees in mounds of paperwork and bleed them dry on legal fees.

    Followed by appeals over whether or not the defendants, if they lose, have to pay the plaintiffs' legal fees too...

    Meanwhile, The H1-B Scam is alive and well, just two stories down from this one on the front page...

  6. Re:Collusion, in tech? by 0123456 · · Score: 2, Insightful

    Corporations were created by governments, so they woudln't even exist in a free market.

    But don't let that spoil your rant.

  7. Post the judgement on Google busses by bob_super · · Score: 4, Funny

    I'm sure the people protesting in SF will be glad to hear that the Googlers are, in fact, underpaid.

  8. Re:Collusion, in tech? by Anonymous Coward · · Score: 2, Insightful

    I don't know why we call our economy free-market, when regular people don't get a chance to participate in a free way

    Because the people who keep braying about the 'free market' are incapable of understanding that it's a purely theoretical construct which has never existed, and which will always be abused by the players -- thereby wiping out most of the claimed benefits we'd get from it.

    The free market is an ideology, which means it is defended the same way -- loudly, uncritically, ignoring the problems with it, and telling us that if they could only force us to adhere to it, it would magically show how awesome it is.

    Pretty much the same thing the Communists said.

    Both Communism and Capitalism can't (and don't) exist as their proponents claim, and can't (and don't) work as advertised.

    But both are willing to let the world burn to bring us all to their glorious new world.

  9. Re:Collusion, in tech? by ShanghaiBill · · Score: 2

    After years of appeals, attempts to bury the employees in mounds of paperwork and bleed them dry on legal fees.

    Uhh ... this is a class action lawsuit. The employees don't have to do any paperwork, and their legal fees will be precisely ZERO. That is the way class action lawsuits work. The lawyers take all the risk (and also reap much of the rewards).

  10. Re:Collusion, in tech? by i+kan+reed · · Score: 2, Insightful

    Murder laws were created by governments, and murders wouldn't exist in a free market(just people killing each other).

    Just because something is defined by law doesn't make something like it, but now legally unconstrained, from existing.

  11. The times, they are a-changing. by jtownatpunk.net · · Score: 4, Interesting

    Not. Looks like things haven't changed in generations.

    My grandpa moved from the east coast to the west coast back in the 50s because of non-poaching agreements in the aircraft industry.

  12. but it didn't remove the option. by YesIAmAScript · · Score: 5, Informative

    The agreement was not to reach out and poach others' workers. It wasn't to refuse to hire them. You still had the option of getting a 25% raise to go to Google, all you have to do is apply to Google.

    The agreement didn't reduce the options available to people, it just made it so the engineer had to take the first step, the recruiter wouldn't call you to entice you.

    --
    http://lkml.org/lkml/2005/8/20/95
    1. Re:but it didn't remove the option. by ranton · · Score: 3, Insightful

      The agreement was not to reach out and poach others' workers. It wasn't to refuse to hire them. You still had the option of getting a 25% raise to go to Google, all you have to do is apply to Google.

      The agreement didn't reduce the options available to people, it just made it so the engineer had to take the first step, the recruiter wouldn't call you to entice you.

      With the exception of my first job and one time that I relocated, every job I have ever had was offered to me when I wasn't even looking for work. I am confident that my next job will probably be offered to me by an ex-coworker, a friend of a friend, or someone else who knows I will be an asset their company and has enough money or interesting enough work to entice me away from my current employer. My current employer did the exact same thing so it wouldn't catch them by surprise. If you aren't constantly worried that your employees are going to jump ship, it is either because you are compensating them very well or you have crap employees.

      If you are doing things right, by your 30s employers will be coming to you not the other way around. If there are agreements out there stopping companies from reaching out to me with job offers that would certainly reduce my opportunities.

      --
      -- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
    2. Re:but it didn't remove the option. by Anti-Social+Network · · Score: 2

      Also consider the horrendous difficulty of getting through automated HR scanner processes. You have to win Buzzword Bingo, and then you have to be matched to a position the company is actively looking to fill.

      That's a nerve-wracking experience in the best of times; however, if you've got somebody inside the company actively tracking your application status and staying on the HR people not to let it fall through the cracks, that's a big benefit to your sanity and your chances of successfully landing a new employer.

      --
      Goddammit just when I get my first +5 the Beta rolls out and kills everything
  13. Re:Collusion, in tech? by Anonymous Coward · · Score: 3, Insightful

    Corporations were created by governments, so they woudln't even exist in a free market.

    Cite one historical example of a free market existing, and working as advertised.

    Bonus points if it doesn't also correspond with slavery, serfs, colonialism, special exemptions from kings or governments, or general examples of how the 'free market' gets manipulated to benefit the wealthy. If you can't, then the whole idea of introducing one is founded on the belief that if we could only create it, it would work, no matter the cost of getting there.

    In that camp, I give you Chairman Mao, Pol Pot, and Josef Stalin.

    Much like those, unregulated Capitalism is a lie, and something some people are willing to force on the rest of the world so it will see just how awesome the vision is and come to see the Inherent Truth in it. And people who claim to be forcing Inherent Truth on us (for our own good, of course) need to be killed before they cause even more damage.

    At its core, Capitalism is just entrenching greed and ownership as a belief system, and allowing the rich to call the shots without any rules or oversight to keep it in check.

    It does not, can not, and never actually has existed or operated as claimed.

    And it certainly does not find optimal solutions based on perfect knowledge in which the suckers, er, consumers, are 'free' to make other choices.

    The reality is, your so-called 'free' market is pretty much a fiction, there is no historical precedent for it, there's no proof it works as claimed. Essentially you believe in the tooth fairy, but keep insisting on forcing us to accept it as a valid system.

  14. Re:Collusion, in tech? by Virtucon · · Score: 3, Insightful

    Agreed, it's not just tech companies. I've seen where quite a few verticals have agreed with their peers not to poach which ultimately drives down wages. These kinds of agreements including non-compete employee contracts need to be abolished once and for all. I was hit one time by being offered a position at another company only to find out that they had a no-poach agreement with the company I was working for. It would have been a nice bump in salary too. About six months after that incident I left anyway for another opportunity.

    --
    Harrison's Postulate - "For every action there is an equal and opposite criticism"
  15. Re:Collusion, in tech? by CohibaVancouver · · Score: 3, Insightful

    Cite one historical example of a free market existing

    I have a friend who makes nice clay pots and sells them on Craigslist for cash.

  16. Re:Collusion, in tech? by 0123456 · · Score: 2

    Cite one historical example of a free market existing, and working as advertised.

    A free market is what people do when no-one holds a gun to their head forcing them to do something else.

    And I don't see what your rant has to do with my point, that corporations themselves wouldn't exist in a free market. Big business exists because of big government, and neither could exist without the other.

    Statists demand bigger and more powerful government, then complain when that results in bigger and more powerful corporations. This just proves they're not very smart.

  17. Re:Collusion, in tech? by Anonymous Coward · · Score: 2, Interesting

    Life? Bah, make me dictator for 8 years and I could straighten out the US. 8 years and then a peaceful transition back to a Democracy after everyone is back on equal footing in the eyes of the law. Really, only easy stuff needs to get done. Take money out of politics, codify a no national security clause to avoid the constitution, put term limits on supreme court justices, remove the ability of lawmakers to exempt themselves, and establish that corporations are not people in respect to rights granted them, so the constitution does not apply to them and they give them an actual legal requirement that they must also consider the general welfare and long term affects of their actions on the financial system as a whole. Also, lobbyist would be illegal entirely, anyone attempting to directly affect the outcome of and opinions of an issue through use of large funds shall be put to death and their assets used to pay debt or put into a rainy day fund.

  18. Re:Collusion, in tech? by plopez · · Score: 2

    A free market is what people do when no-one holds a gun to their head forcing them to do something else.

    Your are confusing a Free Market with an un-regulated market. The stock market for example comes close economically to a free market but is heavily regulated.

    --
    putting the 'B' in LGBTQ+
  19. I worked for HP about 15 years ago. by mark_reh · · Score: 5, Interesting

    Every year the HR people would make presentations to us about how they got together with HR people from other big engineering companies in the valley and decided upon job descriptions and pay and benefits packages, and by the way decided that the COL raise this year would be X%.

    My coworkers, most of whom were oblivious to the big picture, would cheer at the annual pay raise and I would grumble about the salary fixing that they were proudly presenting.

    I wonder if I can get in on the class-action suit...

  20. Re:Collusion, in tech? by TFAFalcon · · Score: 2

    Wouldn't increasing pay also increase the number of things that the workers buy, increasing the profits of the companies? You know, trickle around economics instead of just trickle down.

  21. Re:Collusion, in tech? by rossz · · Score: 2

    I work in a three man devops department. For months we've been short a man. Last friday the other guy quit without notice. So it's now just me running a three man department with limited hope of filling the two empty slots in the immediate future. There are lots of system admins around, but not a lot of them have advanced devops experience.

    --
    -- Will program for bandwidth
  22. Re:Collusion, in tech? by Dahamma · · Score: 3, Insightful

    There probably are no examples. But his point that Corporations don't exist in a free market is still valid.

    No, it's really not. You guys need to brush up on your economics if you are going to keep throwing around "free market" as an *economic term*. A free market economy means basic supply and demand are controlled by the market, not regulated by a government. It has nothing to do with corporations per se, which were created as a form of limited *liability*.

  23. Re:Collusion, in tech? by drsmithy · · Score: 4, Insightful

    Remember, total corporate profits in the US are less than 10% of total wages in the US. "Evil big corporations" are certainly paying as little as they can get away with, but there's not much slack there in the first place. It's not like, on average, we could be paid 20% more if our collective bosses was only more generous - that money just doesn't exist (and small companies are on far thinner margins here - making payroll is a monthly uncertainly for most).

    Why must salary increases for workers be sourced from existing profits ? Why could they not be sourced by reducing the ridiculous pay packages of upper and executive management ?

  24. Re:Collusion, in tech? by Penguinisto · · Score: 2

    Maybe you should consider taking someone on and training them.

    Good advice - this is how I got a junior DevOps admin; I found a dev who wanted to jump in, so I campaigned to get him hired. took a huge load off of me in the process once he ramped up.

    --
    Quo usque tandem abutere, Nimbus, patientia nostra?
  25. Re:Collusion, in tech? by drsmithy · · Score: 4, Insightful

    The point of unions is not to drive the "evil corporations" out of business. That would be counter-productive and stupid.

    The point of unions is to put employees on an equal footing to employers when it comes to negotiations on working conditions and pay.

    Generally, they achieve this goal well.

  26. Re:Collusion, in tech? by Anonymous Coward · · Score: 2, Interesting

    Uh, the definitions of "free market" I know include such annoying details like "informed buyers", which unfortunately already makes this whole thing quite an utopia instead of something real.

    > The free-er the market is, the better it functions

    Not without the "informed buyers", it rather becomes a "lemon market", i.e. a market where only the cheapest product sells since nobody can assess the quality, which then drives down the quality etc. and rather results in a market collapse.
    I guess you could consider "self-destruction" as "working perfectly", but I'd rather not see that variant implemented.