A class action lawsuit against Google, Apple, and other tech companies that struck deals to not "cold call" each other's employees may be on the verge of wrapping up. Similar cases against Oracle and Microsoft have just been filed.
The suit against Microsoft (PDF) says that in 2007, the company struck a deal with several other tech companies not to pursue employees who were at "manager level or above," even if the candidate reached out.
Such behavior is considered illegal by the Department of Justice. In 2010, the DOJ reached settlements with Google, Apple, Adobe, Intel, Intuit, and Pixar, under which they had to stop abiding by such agreements. Later, a class-action civil suit was filed, claiming that more than 60,000 engineers working for those companies had their wages suppressed by the agreements. The defendant companies agreed to pay $324 million to settle that case, but the judge rejected the settlement as insufficient. Rather than make a larger offer, the defendant companies have appealed her decision.
The involvement of Microsoft and Oracle wasn't made public until 2013, when a Google memo about the "Restricted Hiring Practices" was filed as part of the class action case. Now that the case against Google and Apple is headed toward a payout north of $300 million, it's no surprise that other companies engaged in similar practices will be in the crosshairs of current or ex-employees and the employment lawyers they may hire.
The Microsoft lawsuit seeks class-action status. It has two named plaintiffs, Deserae Ryan and Trent Rau. Ryan, a Californian, was a senior product manager for both Xbox Live Go-to-market and the Bing search engine, working for Microsoft from 2006 until 2012. Rau, who lives in Washington state, worked as a lead systems engineer from 2006 to 2010.
The Oracle case was filed a few days before the Microsoft case by Greg Garrison, who managed sales of Oracle's Crystal Ball software in 2008 and 2009.
The cases against Oracle and Microsoft are unlikely to be the end of the line. The Google memo shows that the "Restricted Hiring" practices also applied to Novell and Sun Microsystems, now owned by Oracle. The list of companies on the "no cold call" list is more extensive. It includes companies that have already been sued, like Apple and Intel, but it also includes other big employers that haven't yet been sued, including Comcast, IBM, Genentech, WPP, and Ogilvy.
Certain employees at the "restricted hiring" companies could not be pursued by Google recruiters, even if they reached out. Employees at the "no cold call" companies could be engaged if they reached out to Google, but Google couldn't reach out to them.
One key difference between Oracle and Microsoft, and the earlier defendants, is that the Justice Department never pressed ahead against Microsoft or Oracle—a fact that was pointed out by Microsoft in their statement on the new suit.
"The plaintiffs omit the fact that Department of Justice looked into the same claims in 2009 and decided there was no reason to pursue a case against Microsoft," said a company spokesperson. "We’re confident the court will determine the same in this case."
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