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

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.

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TOPICS: Apple, Google, Intel
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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. 

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Topics: Apple, Google, Intel

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10 comments
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  • Two Words

    Wall Street.
    dilettante
    • What do you mean?

      This is Silicon Valley not Wall Street. It's a very different culture.
      Buster Friendly
  • Before we go handing out kudos

    Let's remember that to begin with, Zuckerberg was the one doing a lot of the poaching, so it's hardly altruistic for him to refuse to join a no-poaching cabal. More importantly, the, only, true hero in this whole sordid affair was Palm CEO Edward Colligan. He's the only one who really stood up to Steve Jobs and not only refused to be a part of the conspiracy but also stated the obvious fact that it was likely illegal (source: http://pando.com/2014/02/19/court-documents-reveal-steve-jobs-blistering-threat-to-ceo-who-wouldnt-join-wage-fixing-cartel/). Now, it helps to understand that Palm by that point really didn't have much to lose, but they should get credit for calling a spade a spade.
    matthew_maurice
    • Altruism is usually phony

      If you expect altruism, you're probably going to get scammed people playing that angle. Elon Musk is the current master of that. The people I respect are those that focus on their plays rather than focus on rigging the game and playing politics.
      Buster Friendly
      • Altruism really isn't the way to put it

        Morality (a sense of right and wrong) is closer to the mark. There are people who think they're obligated to leave their morals at the office door, but they're the main reason why we need so many rules.
        John L. Ries
        • I agree

          I agree except I'm only really concerned with the ethics. If we can agree on a fair and competitive playing field, I'm not all that concerned with why someone else agrees. That gets into too much meaning of life type philosophy where people will never really agree.
          Buster Friendly
  • HUH ???

    "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."
    Rick_R
    • re: HUH ???

      I think the take-away meaning is that it's less per person than the $20M settlement.
      man_on_the_hill
  • And this surprises anyone why?

    Companies have worked in concert to screw their workers and keep them underpayed and desperate since there have been companies. Ever since the Reagan era this has been beaten into us as almost a national religion and to challenge it was almost like being branded a heretic.
    Sir Name
    • ...and there used to an answer to that problem...

      It was called unions, which started for exactly the same reasons as this lawsuit addresses (the conditions were a bit more brutal and the wages a lot lower in the 1880s, but the principle was the same).
      I personally don't like what unions have become (more like collective wage extortion agencies combined with PACs than champions for better worker conditions these days), but their original purpose was a good one, and specifically aimed at shenanigans from captains of industry like this non-poaching pact.
      man_on_the_hill