There's no free lunch for short-changed Silicon Valley workers...

Summary:US judge rules that more than 64,000 tech workers have a strong claim against Silicon Valley's most successful companies in a lengthy conspiracy to hold down their wages and careers.

 

Facebook
Above, Facebook HQ - CEO Mark Zuckerberg refused to take part in scheme against tech workers.

Late Friday in San Jose, US District Judge Lucy Koh said a $324.5 million class action settlement agreed by Apple, Google, Intel and Adobe, was too low given that the case against the plaintiffs had strengthened and that it was less than a $20 million settlement paid by Lucasfilm, Intuit, and Pixar who were also part of the collusion.

It would need to increase by at least $55 million to $380 million. The original suit asked for $3 billion in damages rising to $9 billionn under antitrust penalty laws.

Apple is ranked #1 in Silicon Valley based on revenues and profit; Google is second most profitable; Intel is fourth largest; and Adobe is number 25 with $4 billion in revenues and $272 million in 2013 profits. (Source: SV150 Rankings.)

Facebook refused to join in the conspiracy and that resulted in Google having to increase engineers' salaries by 10% to stop them leaving.

Foremski's Take: This is a shameful multi-year collusion from companies who are Silicon Valley's largest, and richest and who constantly declare their devotion to their engineers by providing them with free lunches and everything else they need. It's a halitosis of hypocrisy — it stinks. Clearly, there's no free lunch — the employers made out like bandits on savings from lower salaries, hiring costs, and staff turnover. 

A free lunch and a ride to work is cheap compared to the billions of dollars they saved by working against their own people — more than 64,000 workers. It's understandable that they would prefer to quickly settle the case and put a lid on the public access to hugely embarrassing emails between top executives.

More damaging than the salary caps is the harm to employees' lifetime prospects by actively working to stop them from moving to potentially career-defining opportunities at other companies. 

A rusting legacy...

The Steve Jobs legacy is becoming quickly tarnished with an unflattering patina of flaking rust. The judge identified Steve jobs as the "central figure in the alleged conspiracy."  His role was despicable but so was the enthusiastic agreement of the CEOs of major Silicon Valley tech companies, such as Google's CEO Eric Schmidt. 

Facebook CEO Mark Zuckerberg deserves to be lauded for his refusal to take part in Jobs' scheme. 

The plaintiffs should pay the extra $55 million and settle the case as quickly as possible and hope people will forget this disgraceful episode in Silicon Valley's timeline. 

Related: 

Topics: Apple, Google, Intel

About

In May 2004, Tom Foremski became the first journalist to leave a major newspaper, the Financial Times, to make a living as a full-time journalist blogger. He writes the popular news blog Silicon Valley Watcher--reporting on the business of Silicon Valley.Tom arrived in San Francisco in 1984, and has covered US technology markets for leadi... Full Bio

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