Silicon Valley execs sue giants for billions

WHEN Silicon Valley technology giants enter the court room, it is usually to battle one of their rivals.

But next month, Google, Apple, Intel and Adobe will be in the dock to face the same opponent. Technology executives have formed a group to sue the companies for alleged collusion to suppress their wages, after they signed “no-poach” pacts barring them from recruiting each other’s staff.

The companies, with a total value topping $890-billion, could be forced to pay handsomely to compensate them for the losses, but they are likely to be far more worried about the details the case will expose.

Documents lodged with the court shine a potentially embarrassing light on the way the tech giants operate, especially Apple, former CEOs of which warned rivals of repercussions if they did not sign up to pacts.

According to one e-mail sent by Google co-founder Sergey Brin to his staff, former Apple CEO Steve Jobs phoned him to warn him off recruiting Apple’s employees.

Brin said in a memo to his team in 2005 that Jobs told him: “If you hire a single one of these people, that means war.”

On another occasion, he told Adobe that Apple would launch a raid on its staff if Adobe did not agree to the truce.

But while Apple appears to have pursued the no-poach pacts more aggressively, it was not the only instigator. Between 2005 and 2010, Google struck near-identical deals with Intel and Intui.

Facebook was alone in resisting the no-poach pacts. Intuit chief Bill Campbell tried to pull the social platform into the cir- cle, but Facebook’s chief operating officer, Sheryl Sandberg, said in documents that she resisted their friendly request.

For those who joined, their motives were clear. About 100 000 staff signed up to the class-action lawsuit, demanding that the companies hand over $9-billion to cover the cost of the wages they lost. — © The Daily Telegraph, London