Apple's involvement in an agreement with other tech companies to not poach employees from each other has landed it in another lawsuit, this time from a shareholder claiming the deal cost the company value, and that executives misled investors. The class action lawsuit names current CEO Tim Cook, along with William Campbell, Millard Drexler, Arthur Levinson, Robert Iger, Andrea Jung, Fred Anderson, and the Estate of Steve Jobs.
Apple faces shareholder lawsuit over employee anti-poaching deal
R Andre Klein filed the lawsuit earlier this week on behalf of shareholders claiming Apple violated the U.S. Securities and Exchange Act and California laws related to fiduciary duty and honest business practices.
The lawsuit stemmed from an agreement between Apple, Google, Adobe, Intel, Intuit, Pixar, and Lucasfilm several years ago to not hire away employees from each other. That led to a lawsuit from Silicon Valley tech workers who claimed they were blocked from better paying jobs because of the agreement.
Intuit, Pixar, and Lucasfilm all agreed to a $20 million settlement, which was approved, but a separate $324.5 million settlement from Apple, Google, Intel, and Adobe was rejected. Judge Lucy Koh has been overseeing the case and felt the second settlement amount was unfair to employees and needed to be much higher.
According to Judge Koh, the evidence in the case strongly suggests former Apple CEO Steve Jobs was the ring leader in the anti-poaching agreement, which the new shareholder lawsuit points out as a point in the company's breach of trust with shareholders.
The lawsuit also notes that Apple failed to tell shareholders about the Department of Justice investigation into the anti-poaching allegations, or that a settlement had been reached as part of that case. The lawsuit states,
Despite the DOJ's investigation, Apple did not disclose to its shareholders the details of the DOJ's investigation. None of Apple's proxy statements, quarterly filings, and annual filings disclosed the DOJ investigation, the settlement reached in September of 2010, or the final judgment signed on March 17, 2011.
The DOJ found that the companies involved acted in an anti-competitive nature, and where in violation of Federal antitrust laws. The deal, the DOJ said, blocked competition and artificially barred workers from better paying jobs.
This new filing means Apple, Google, Intel, and Adobe are facing a potentially embarrassing trial from the class action lawsuit started by employees, and now Apple is looking at the prospect of a second trial brought by its own shareholders.
The shareholder case was filed in California Northern District Court in San Jose and was assigned to Judge Paul Singh Grewal. Apple hasn't commented on the case.
[Thanks to Patently Apple for the heads up]