A California district court judge recently denied summary judgment motions by Defendants Google, Apple, Adobe, and Intel (collectively, "Defendants"), allowing the antitrust class action claims against them to move forward. The Plaintiffs allege that Defendants entered into several bilateral agreements with each other not to "cold call" each other's employees. The Plaintiffs further allege that these agreements formed an overarching conspiracy that suppressed wages for all Defendants' employees in violation of Section One of the Sherman Antitrust Act and Section Four of the Clayton Antitrust Act.
The court found that genuine issues of material fact of a conspiracy between the Defendants precluded summary judgment. For example, the court noted Plaintiffs' allegations that Google maintained an explicit do-not-cold-call list that was not designed for circulation and tried to ensure the agreements were known only to executives and recruiters who had to enforce them. For example, Plaintiffs allege that Google Chairman Eric Schmidt instructed one of his employees that Mr. Schmidt preferred that the list be shared verbally because "I don't want to create a paper trail over which we can be sued later." Similarly, in response to a request from an Intel recruiter, Intel's CEO allegedly stated that, "we have a hand-shake 'no-recruit' between Eric Schmidt and myself. I would not like this widely known." Moreover, the same small group of intertwining executives of Defendants allegedly enforced the agreements. For example, when a Google recruiter contacted an Apple engineer, Steve Jobs allegedly forwarded the e-mail to Eric Schmidt, who then had the recruiter terminated within an hour.
Accordingly, in denying the summary judgment motions, the court held that: "the similarities in the various agreements, the small number of intertwining high-level executives who entered into and enforced the agreements, Defendants' knowledge about the other agreements, the sharing and benchmarking of confidential compensation information among Defendants and even between firms that did not have bi-lateral anti-solicitation agreements, along with Defendants' expansion of the anti-solicitation agreements constitutes evidence, viewed in the light most favorable to Plaintiffs, that tends to exclude the possibility that Defendants acted independently, such that the question of whether there was an overarching conspiracy must be resolved by a jury."