In 2010, the Department of Justice (DOJ) filed suit against Adobe Systems, Apple, Google, Intel, Intuit, and Pixar over various agreements not to solicit each other’s employees. All six companies entered into a settlement with the DOJ prohibiting them from engaging in such practices, but they paid no financial penalties. Undoubtedly spurred to action by the DOJ case, plaintiffs’ attorneys filed a civil class action alleging antitrust violations in September 2011 on behalf of some 64,000 employees against Adobe, Apple, Google, Intel, Intuit, Lucasfilm, and Pixar. Specifically, the lawsuit alleged that by entering into so-called antipoaching agreements, executives at those powerful Silicon Valley companies conspired to drive down salaries. Image may be NSFW.
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Civil case based on findings from DOJ inquiry
According to the complaint, senior executives at the companies agreed not to recruit each others’ employees and to notify each other when making an offer to another company’s employee. They also agreed that if one of them offered a job to another company’s employee, no other company would make a higher counteroffer to that employee. The complaint included reference to the DOJ’s finding that the companies’ agreements violated federal antitrust law. The plaintiffs sought damages of up to $3 billion, which could have been tripled under antitrust law provisions.
Last year, Pixar, Lucasfilm, and Intuit settled the claims against them for $20 million. However, that was before the court granted a motion allowing the case to proceed as a class action, which gave the plaintiffs added leverage. That left Google, Apple, Adobe, and Intel in the case, with the trial set to begin at the end of May.
The four remaining companies have now agreed to settle the case, subject to the court’s approval. While the amount of the settlement hasn’t been released, according to the New York Times, it was approximately $300 million, or a little over $4,000 for each employee.
You’d think they would know better
News reports have highlighted e-mails between top executives at the companies that portrayed them in a very negative light. In one e-mail exchange after a Google recruiter solicited an Apple employee, Google’s former CEO, Eric Schmidt, told Steve Jobs that the recruiter would be fired. Jobs forwarded Schmidt’s e-mail to a top Apple HR executive with a smiley face.
In another e-mail exchange, Google’s HR director asked Schmidt about sharing its no-cold-call agreements with competitors. Schmidt, who is now Google’s executive chairman, responded that he preferred “it be shared ‘verbally, since I don’t want to create a paper trail over which we can be sued later.’” In a similar exchange, an Intel recruiter asked Paul Otellini, Intel’s CEO at the time, about a deal with Google. Otellini replied, “We have nothing signed. We have a handshake ‘no recruit’ between Eric [Schmidt] and myself. I would not like this broadly known.”
Many of the documents portrayed Jobs in particular as something of a bully. In one e-mail that became public, he threatened Google, “If you hire a single one of these people, that means war.” Indeed, defense lawyers were sufficiently worried about how Jobs would be portrayed in documents that they made a motion to preclude evidence of his personality at trial. The trial judge hadn’t ruled on that motion at the time of the settlement.
It’s ironic that the executives embroiled in this dispute, certainly among the savviest and most highly paid in the country, could be so careless in their e-mail communications. You don’t have to be the CEO of Apple to know that e-mails can last forever. Even after they’re “deleted,” they will likely still be stored on a server or backup tape somewhere.
Think before you type
Largely for that reason, and because we all communicate extensively through electronic means, e-mails are now unquestionably the most common evidence used in employment cases. All employees―but especially HR professionals and management―must be trained to be careful about how they communicate in e-mails.
Imagine every e-mail you write being read to a jury. You might think that’s a long shot, but any employment attorney will tell you that it happens all the time. A little joke between managers may seem harmless at the time, but a jury probably won’t think the joke was too funny. Even a seemingly harmless offhand comment can look bad when it’s taken out of context.
And as this case illustrates, e-mail communication can reveal a lot about someone’s personality. The attorneys were so worried that Steve Jobs would come across looking like a jerk that they filed a motion to keep evidence of his personality out of the case. If your company is sued, would you rather have e-mail evidence that shows your managers seem like bullies or tyrants or that makes them appear helpful and responsive to employees’ concerns? And while you’d think it’s obvious, if you must discuss highly sensitive topics ― i.e., something that you “don’t want to create a paper trail over”―don’t put it in an e-mail!
Bottom line
We will likely never know whether the Silicon Valley senior executives sent such reckless e-mails because they believed they were doing nothing wrong, because they thought they would never get caught, or because they just didn’t care. But the case certainly sends a message to anyone who isn’t a CEO at a huge Silicon Valley tech firm: Be careful about what you put in e-mails.
Matthew A. Goodin is an employment law attorney with Epstein, Becker & Green in San Francisco and a frequent contributor to California Employment Law Letter. He may be contacted at mgoodin@ebglaw.com.