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Apple, Google Must Face Group Antitrust Hiring Lawsuit

Apple Inc. (AAPL), Google Inc. (GOOG) and two other Silicon Valley companies must face a group lawsuit representing more than 64,000 technical employees claiming their incomes were held down by the companies’ agreements not to recruit one another’s workers.

U.S. District Judge Lucy Koh in San Jose, California, yesterday granted class-action certification. Koh’s ruling follows an April ruling rejecting the employees’ bid to proceed as a class -- partly because they failed to demonstrate that all or almost all class members were affected by the anti-solicitation agreements -- and an August hearing in which she said the case was “much stronger” after additional pretrial information gathering.

The suit represents software and hardware engineers, programmers, animators, digital artists, Web developers and other technical professionals, according to the ruling. Kelly Dermody, a lawyer representing them, said in an e-mail that there are as many as 64,626 potential class members.

“The court finds that, based on the extensive documentary evidence, economic theory, data, and expert statistical modeling, plaintiffs’ methodology demonstrates that common issues are likely to predominate over individual issues,” Koh wrote in her ruling.

The lawsuit is a private action on behalf of employees that mirrors claims the companies settled with the U.S. Justice Department in 2010. Intel Corp. (INTC) and Adobe Systems Inc. (ADBE) are the other remaining defendants.

‘Top Talent’

“We have always actively and aggressively recruited top talent,” Google said in an e-mailed response to Koh’s ruling.

Apple spokeswoman Kristin Huguet and Intel spokesman Chris Kraeuter declined to comment. Adobe, in an e-mailed statement also declined to comment.

Three companies named in the original complaint, Intuit Inc. (INTU) and Walt Disney Co. (DIS)’s animation studio Pixar and visual-effects specialist Lucasfilm Ltd., have tentatively settled the antitrust claims.

While Koh must approve the settlements, Intuit has agreed to pay $11 million, and Pixar and Lucasfilm will together pay $9 million as part of the agreements, Dermody said. Employees from those three companies represent 8 percent of the class, she said.

The companies had argued that the employees’ lawyers failed to show that everyone in the proposed group was hurt by any such no-hire agreements with rivals, as is required for class certification.

The case is In re High-Tech Employee Antitrust Litigation, 11-cv-02509, U.S. District Court, Northern District of California (San Jose).

To contact the reporters on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net; Karen Gullo in San Francisco at kgullo@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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