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From Antitrust Law Daily, October 25, 2013

Class of technical employees certified in antitrust action against high-tech companies

By Jeffrey May, J.D.

The federal district court in San Jose, California, has certified a proposed class of more than 50,000 “technical employees” of high-tech companies to proceed with claims against the employers for conspiring to fix and suppress employee compensation and to restrict employee mobility through anti-solicitation agreements among the firms (In re High-Tech Employee Antitrust Litigation, October 24, 2013, Koh, L.).

The court’s decision to grant the plaintiffs’ supplemental motion for class certification comes after an earlier motion for class certification was denied in April. The named plaintiffs are software engineers who were former employees of major tech companies, including Adobe Systems Inc., Apple Inc., Google Inc., Intel Corp., Intuit Inc., Lucasfilm Ltd., and Pixar.

The proposed class action followed Department of Justice Antitrust Division civil actions against the firms, which were resolved by consent decrees in 2011 (2011-1 Trade Cases ¶77,477, 2011-1 Trade Cases ¶77,483). The plaintiffs contended that they brought the case as private attorneys general “to pick up where the DOJ left off, to seek damages for themselves and for the Class.”

The proposed class was defined as: “All natural persons who work in the technical, creative, and/or research and development fields that are employed on a salaried basis in the United States by one or more of the following: (a) Apple from March 2005 through December 2009; (b) Adobe from May 2005 through December 2009; (c) Google from March 2005 through December 2009; (d) Intel from March 2005 through December 2009; (e) Intuit from June 2007 through December 2009; (f) Lucasfilm from January 2005 through December 2009; or (g) Pixar from January 2005 through December 2009.” It excludes the defendants’ retail employees, corporate officers, members of the boards of directors, and senior executives.

Job titles within the technical class include: (1) Software Engineers, (2) Hardware Engineers and Component Designers, (3) Application Developers, (4) Programmers, (5) Product Developers, (6) User Interface or User Experience Designers, (7) Quality Analysts, (8) Research and Development, (9) Animators, Digital Artists, Creative Directors and Technical Editors, (10) Graphic Designers and Graphic Artists, (11) Web Developers, (12) IT Professionals, (13) Systems Engineers and Administrators, and (14) employees classified as technical professionals by their employers.

According to the plaintiffs, the class is composed of “those technical employees whose work contributed to Defendants’ core business functions, whom the Defendants heavily recruited and jealously guarded, and who appear at the very crux of Defendants’ conspiracy and this case.”

In its earlier decision, the court concluded that the plaintiffs did not fulfill the requirements of Rule 23(b)(3) of the Federal Rules of Civil Procedure. This time, the court ruled that the plaintiffs did satisfy the requirement, despite the defendants’ arguments that neither antitrust impact nor damages could be proven on a classwide basis. The defendants contended that compensation was set by hundreds of different managers who were directed to differentiate pay and reward high achieving employees.

Common questions were likely to predominate over individual questions with respect to the alleged antitrust violation, antitrust impact, and damages, the court ruled. The antitrust violation was likely to be a central, disputed issue at summary judgment and at trial, it was noted. And there was voluminous classwide proof of an antitrust violation.

In its initial ruling rejecting class certification, the court expressed concern about the evidence and proposed methodology to prove impact. Now the court pointed to “extensive documentary evidence, economic theory, data, and expert statistical modeling” to support certification of a technical class. Experts opined that the anti-solicitation agreements suppressed compensation of all or nearly all members of the proposed technical class. The plaintiffs also offered an expert’s model, which was capable of calculating classwide damages, in the court’s view. Lastly, the court ruled that a class action was the superior method for adjudicating the controversy.

The case is No. 11-CV-2509-LHK-PSG.

Attorneys: Anne Brackett Shaver (Lieff, Cabraser, Heimann & Bernstein LLP) for the plaintiffs. Anne M. Selin (Mayer Brown LLP) for Google Inc.; Christina Joanne Brown (O’Melveny & Myers) for Apple Inc.; Catherine Tara Zeng (Jones Day) for Intuit Inc.; Donn P. Pickett (Bingham McCutchen, LLP) for Intel Corp.; Craig Andrew Waldman (Jones Day) for Adobe Systems Inc.; Cody Shawn Harris (Keker and Van Nest LLP) for Lucasfilm Ltd.; Robert T. Haslam, III (Covington & Burling LLP) for Pixar.

Companies: Google Inc.; Apple Inc.; Intuit Inc.; Intel Corp.; Adobe Systems Inc.; Lucasfilm Ltd.; Pixar.

MainStory: TopStory Antitrust CaliforniaNews

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