Reuters

(Reuters)

Apple, Google Face Suit Over Alleged Workers' Salary Poaching Deal

Features

Tech companies have earlier forged an informal agreement that allows them to cap employee's salary through an invisible protocol that prohibits the hiring of workers still on active roll of each firm, reports said.

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The company in question were Apple, Adobe, Google, Intel and Pixar, which is a subsidiary of Walt Disney.

In a suit lodged by five software engineers, Reuters reported that the companies were accused of stifling free movements among their respective employees and prevented them from pursuing better payment opportunities.

The informal deal, according to court records, had aimed to stop the companies' talents from seeking higher offers that could be dangled by well-meaning company supervisors.

And the penalty for the so-called employee poaching is immediate termination like in the case of a Google staff who attempted to lure an Apple engineer to jump ship in 2007, with assumptions of a more attractive salary package.

It appeared though that then Apple CEO, Steve Jobs, got wind of the transaction and fired off a personal email to Google chief Eric Schmidt, who then doubled as a member of Apple's board.

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"I would be very pleased if your recruiting department would stop doing this," Reuters reported that Jobs as writing in an email on March 2007, which was immediately taken up by Schmidt.

Following some course of actions, Schmidt was later advised by Google's HR department that the employee who tried to recruit from across the Apple fence "will be terminated within the hour," Reuters wrote.

That incident galvanised their claims that Apple and Google had connived to keep their employees from seeking growth.

However, in a statement issued Friday last week, Google stressed its tradition of "always actively and aggressively recruiting top talent."

Also in the same day, Intel told Reuters that it "disagrees with the allegations contained in the private litigation related to recruiting practices and plans to conduct a vigorous defence."

Court records also showed that the companies have asked the court to throw out the case, denying that they "engaged in bilateral anti-poaching deals to protect collaboration."

The court denied the motion but U.S. District Judge Lucy Koh allowed for a possible adjustment of the class suit, which could produce multiple cases on its stead.

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