Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Author: Scarinci Hollenbeck, LLC
Date: November 7, 2013
The Firm
201-896-4100 info@sh-law.comA lawsuit alleging that several of the country’s most powerful high-tech companies had a secret, non-compete deal recently received class-action certification. More than 60,000 employees of Adobe Systems Inc., Apple Inc., Google Inc., and Intel Corp. are members of a class that allege that the pact not to recruit or hire each other’s employees resulted in decreased competition and lower salaries.
As we previously discussed on this Business Law Blog, many of the same Silicon Valley companies entered into a settlement with the Department of Justice in 2010 over similar allegations. Although they did not admit wrongdoing, they agreed to end the practice of entering agreements to refrain from, or pressure others to refrain from, soliciting, recruiting, or otherwise competing for another firm’s employees.
More recently, Lucasfilm and Pixar agreed to pay a combined $20 million to settle the civil antitrust claims against their companies. However, the remaining defendants employ over 90 percent of the class members.
The class certification process was not an easy process for the plaintiffs, and reflects the tough new standards established by the U.S. Supreme Court in Walmart v. Dukes, Comcast v. Behrend, and Amgen v. Connecticut Retirement Plans. U.S. District Judge Lucy Koh of the Northern District of California previously denied certification, but allowed the plaintiffs to provide additional evidence regarding the commonality of the harm suffered by the class.
After presenting new deposition testimony and limiting the class to only technical workers, the Judge changed her mind, concluding, “Plaintiffs’ evidence suggests not only that the anti-solicitation agreements eliminated a key tool of recruitment, cold calling, but also that the impact of this elimination affected the entire technical class.”
While liability must still be proved by plaintiffs, even the costs of defending these claims highlight that anti-poaching agreements have the potential to result in very costly liability. It must be understood that there are strong public policies on both federal and state levels against the restraint of trade. California, for example, outlaws non-compete agreements in employment agreements that do not involve the sale of a business. Non-solicitation agreements generally do not cause such problems provided they are not part of a conspiracy among employers as opposed to agreements entered into directly between employers and their employees.
The latest decision further suggests that the Supreme Court has not put class action suits totally out of reach. This case also demonstrates that obtaining a certification still remains a major hurdle for plaintiffs’ lawyers, however.
If you have any questions about this case or would like to discuss the legal issues involved, please contact me, Gary Young, or the Scarinci Hollenbeck attorney with whom you work.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
If you’re considering closing your business, it’s crucial to understand that simply shutting your doors does not end your legal obligations. Unless you formally dissolve your business, it continues to exist in the eyes of the law—leaving you exposed to ongoing liabilities such as taxes, compliance violations, and potential lawsuits. Dissolving a business can seem […]
Author: Christopher D. Warren
Contrary to what many people think, corporate restructuring isn’t all doom and gloom. Revamping a company’s organizational structure, corporate hierarchy, or operations procedures can help keep your business competitive. This is particularly true during challenging times. Corporate restructuring plays a critical role in modern business strategy. It helps companies adapt quickly to market changes. Following […]
Author: Dan Brecher
Cryptocurrency intimidates most people. The reason is straightforward. People fear what they do not understand. When confusion sets in, the common reaction is either to ignore the subject entirely or to mistrust it. For years, that is exactly how most of the public and even many in law enforcement treated cryptocurrency. However, such apprehension changed […]
Author: Bryce S. Robins
Using chattel paper to obtain a security interest in personal property is a powerful tool. It can ensure lenders have a legal claim on collateral ranging from inventory to intellectual property. To reduce risk and protect your legal rights, businesses and lenders should understand the legal framework. This framework governs the creation, sale, and enforcement […]
Author: Dan Brecher
For years, digital assets operated in a legal gray area, a frontier where innovation outpaced the reach of regulators and law enforcement. In this early “Wild West” phase of finance, crypto startups thrived under minimal oversight. That era, however, is coming to an end. The importance of crypto compliance has become paramount as cryptocurrency has […]
Author: Bryce S. Robins
Earlier this month, the U.S. Supreme Court issued a decision in Ames v. Ohio Department of Youth Services vitiating the so-called “background circumstances” test required by half of federal circuit courts.1 The background circumstances test required majority group plaintiffs pleading discrimination under Title VII of the Civil Rights Act to meet a heightened pleading standard […]
Author: Matthew F. Mimnaugh
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!