Apple CEO Tim Cook will be forced to face a four-hour deposition in an anti-poaching civil suit brought by five former employees of major tech firms, including Apple, Google, and Intel, Reuters reported late Thursday. The plaintiffs claim that the defendant companies illegally entered anti-poaching agreements, eliminating competition for talent between the firms and costing the plaintiffs hundreds of millions of dollars in lost pay and benefits.
Judge Lucy Koh, who is familiar with Apple after presiding over the company’s patent infringement trial with Samsung last summer, issued the order Thursday compelling Mr. Cook to appear for questioning by the plaintiffs’ attorneys. Judge Koh is currently attempting to determine if the lawsuit can proceed as a class action, exposing the defendant companies to hundreds of millions in potential damages and increasing the likelihood of a large settlement.
Judge Koh made initial indications that she believes the anti-poaching agreements, forged between 2005 and 2010 as revealed by internal emails, were based on a mutual understanding by the companies’ executives that a collective approach to hiring would be more economically efficient than individual competitive negotiations with each employee. “That, I think, is the biggest problem for the defendants,” Judge Koh told the attorneys.
No ruling on the class action status of the suit has yet been made, however, with Judge Koh citing several “holes” that also exist in the plaintiffs’ evidence. She is now seeking more information from key executives at the companies, but has been frustrated by the slow response and roadblocks that have thus far prevented most executives from being deposed.
As a result, she has begun issuing orders to compel certain executives to appear, starting with Mr. Cook. Google’s Eric Schmidt will also face questioning next month, along with Intel’s Paul Otellini.
Judge Lucy Koh
Apple attorney George Riley attempted to keep Mr. Cook out of the litigation, arguing to the court that the agreements took place before Mr. Cook assumed the role of CEO in 2011, and that in his previous position as chief operating officer he had no role in any of the discussions with other firms about hiring policies. Judge Koh was not convinced, however, telling Mr. Riley that she “finds it hard to believe a COO would have no say over salary and compensation for all employees.”
In addition to the civil suit, Apple has also faced government pressure over its allegedly illegal anti-poaching agreements. Apple, Adobe, Google, Intel, Inuit, and Pixar settled with the U.S Department of Justice in late 2010 over the same anti-poaching tactics at issue in the current lawsuit. Under that settlement, the companies are prohibited from any kind of agreement that stops recruiters from “soliciting, cold calling, recruiting, or otherwise competing for employees.”
It is not known if Judge Koh will wait to hear the depositions of all key executives before making her ruling on the class action status of the suit. The case is In Re: High-Tech Employee Antitrust Litigation, 11-cv–2509, U.S. District Court, Northern District of California.