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Thursday May 5, 2011 3:35 pm

Apple, Google, Lucasfilm, Intel and more sued for secretly conspiring to fix employee pay

Posted by Andru Edwards Categories: Apple, Corporate News, Google

google ipodA former Lucasfilm software engineer on Wednesday filed a class-action lawsuit against a who's who of Silicon Valley tech giants, alleging a conspiracy to fix employee pay and not poach staff away from each other in violation of anti-trust laws.

Siddharth Hariharan, a former Lucasfilm employee who is the founder and CEO of game developer InEarth, is suing Lucasfilm, Adobe, Apple, Google, Intel, Intuit, and Pixar.

Hariharan is represented by Joseph Saveri of the national plaintiffs' law firm Lieff Cabraser Heimann & Bernstein.

The suit claims that an alleged "no-solicitation" agreement between the named companies resulted in employee compensation being reduced by "10 to 15 percent" as compared to "what would have prevailed in a properly functioning labor market where employers compete for workers."

In addition to an alleged pact between the companies to avoid actively recruiting each other's employees, the suit alleges that the firms agreed to notify each other when making an offer to another company's employee without the employee's consent or knowledge. Another alleged agreement between the companies set a cap on pay packages offered to prospective employees.

The lawsuit cites a 2010 U.S. Department of Justice investigation of "similar misconduct" by the defendants as a source of evidence for the allegations. A 2009 Federal Trade Commission investigation into the relationship between the boards of Apple and Google led to reports of an alleged "gentleman's agreement" between the two companies not to hire away each other's workers.

"The evidence we have is listed in significant detail in the complaint. There's evidence that there were these agreements made at pretty high levels at these companies," Saveri told PCMag Wednesday.

The suit alleges that Lucasfilm and Pixar first entered a "no solicitation" agreement with regards to each other's workers in 2005. The practice allegedly spread to the other companies named in the suit later, Saveri said.

"The earliest evidence we have involves Lucasfilm and Pixar, and it kind of became an Apple thing later on. There's kind of a cascading effect," he said.

According to Saveri, the DOJ investigation in 2010 led to the companies named in the suit agreeing to stop their alleged collusion on hiring matters. The class action suit filed by Hariharan seeks compensation for employees negatively affected by that alleged misconduct, he said.

The companies named in the lawsuit had not commented on the matter as of Wednesday evening. The complaint was filed in California Superior Court in Alameda County.

This article, written by Damon Poeter, originally appeared on PCMag.com and is republished on Gear Live with the permission of Ziff Davis, Inc.

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