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Silicon Valley Workers May Pursue Salary-Fixing Lawsuit

Posted by Unknown on from the next-thing-they'll-be-letting-them-unionize dept.

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."

20 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 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
    4. 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. 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.

  7. 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.

  8. 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
  9. 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.

  10. 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"
  11. 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.

  12. 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...

  13. 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*.

  14. 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 ?

  15. 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.