Judge OKs Conspiracy Claim in Silicon Valley ‘No Poach’ Suit

(The Recorder)  U.S. District Judge Lucy Koh ruled Friday that plaintiffs have provided enough evidence to move forward with claims that four of the nation’s largest technology companies conspired to drive down employee wages through a web of agreements not to recruit each other’s workers.

It should be up to a jury to decide whether that conspiracy existed, Koh concluded, denying motions for summary judgment filed in January by Google Inc., Adobe Systems Inc., Intel Corp., and Apple Inc.

Koh cited evidence that the companies knew of each other’s agreements, that high-level executives were involved in establishing and policing the accords, and that defendants shared confidential information they would otherwise have been expected to hold close.  That evidence, she wrote, “tends to exclude the possibility that defendants acted independently.”

For instance, Google circulated an email comparing its bonus plan with those at Apple and Intel, Koh stated.

Intel’s former CEO Paul Otellini, who serves on Google’s board of directors, subsequently shared the same information, according to Koh’s order, saying that he “lifted it from Google.”

“A reasonable jury could infer that this confidential information could be shared safely by competitors only because the anti-solicitation agreements squelched true competition,” Koh stated.

Google, Adobe, Intel, and Apple are accused of brokering illegal agreements not to recruit each other’s employees.  A trial is set for May.

Intuit, Lucasfilm, and Pixar, initially named in the suit, have settled with plaintiffs for a combined $20 million.  Settlement talks with the remaining defendants are ongoing, the parties confirmed at a hearing Thursday.

For the purpose of its summary judgment motion, Google, represented by Mayer Brown and Keker & Van Nest, conceded it entered into three separate agreements not to cold-call employees working for Apple, Intuit, and Intel, but argued that each pact was individual and not part of an industrywide conspiracy.

“Even after extensive discovery, plaintiffs have been forced to concede that there is no direct evidence to support this extravagant claim,” Mayer Brown attorneys Lee Rubin, Edward Johnson, Donald Falk, and Anne Selin stated in Google’s motion for summary judgment.

In their opposition brief, plaintiffs’ lawyers called the position “far-fetched.”

“It is no defense that defendants’ conspiracy consisted of a network of unlawful bilateral agreements,” wrote attorneys at Lieff Cabraser Heimann & Bernstein and the Joseph Saveri Law Firm.  “It is well-established that a single conspiracy may be comprised of—or implemented through—individual agreements, communications, or understandings.”

Kelly Dermody, a partner with Lieff Cabraser, and Joseph Saveri both said they look forward to presenting their case to a jury.

“It’s just good to reach milestones like this in the case,” Dermody said, “and move on to the next thing.”

Rubin directed comments on Friday’s ruling to Google.  A company representative declined comment.

(Reporting by Marisa Kendall)