A federal judge ruled that a lawsuit against Google and several other companies can proceed as a class-action suit today after determining that a significant number of employees across the tech industry were hurt by “do-not-hire” arrangements between their employers and other companies. The policies in question were practiced by Google, Apple, Adobe, Pixar, and more as a way of keeping their own employees from defecting to competitors for higher pay. Essentially the agreements barred two companies from offering jobs to competing employees for a higher salary. Because doing so gave employees leverage with which to bargain for higher pay at their own jobs, employers were often faced with the decision to either pay any given employee more to keep them around or lose them to a competitor willing to pay more.
To avoid bidding wars, several companies made arrangements to avoid contacting or offering employment to each other’s employees. The employees were understandably upset by this practice, as it weakened their ability to bargain for raises or find jobs elsewhere in the industry. Earlier this year a judge ruled that there was insufficient evidence to continue the case as a class-action suit, but after the plaintiffs gathered more evidence of the harmful practice, the judge reversed course and granted them class status.
You may remember that the same companies involved in this latest suit were also sued by the Department of Justice several years ago for the same practices. In that case, the DOJ did not award damages to any employees, a decision the employees are now contesting with this suit. The trial is scheduled for May 2014, although it could be delayed by further legal shenanigans by the companies being sued.