Some of the largest tech companies in the world including Google, Apple, Intel and Adobe will have to go to civil court to defend themselves against charges of wage collusion. The companies are accused of attempting to limit the pay of employees by agreeing to not recruit engineers from one another. Several companies who were supposedly involved in the agreement have already settled out of court. The federal judge has just made the decision that the civil trial can go forward, despite efforts by the tech giants to get it thrown out.
According to a report from the Wall Street Journal, the trial is scheduled to begin on May 27th, and could affect up to 64,000 people who worked with these firms from 2005 to 2009. In addition, it will have an indirect affect on thousands of other engineers who currently work for these firms. If the companies are forced to pay fines for their agreement, it will obviously mean that these types of agreements can’t continue. This will effectively open the flood gates of talent poaching in Silicon Valley, and will likely result in many top engineers getting some great employment offers.
The plaintiffs in the case have a significant amount of evidence that shows that these tech firms were working together to limit recruiting from each other. Included in their evidence are emails between Steve Jobs (former CEO of Apple), Eric Schmidt (executive from Google) and Bill Campbell (chairman of Intuit).
Keeping wages artificially low works against the free market method of determining how much people are able to earn. This can be considered a type of monopoly, though since it is at a fairly small scale it won’t likely escalate past this civil trial.
