With its lavish perks and sprawling campuses, Silicon Valley has at times been the envy of many in corporate America, but nearly 65,000 software engineers claim they were unable to jump companies for higher pay because of a series of deals allegedly made by their bosses -- bosses like Sergey Brin and Eric Schmidt of Google and Apple's Steve Jobs.
"These were non-solicitation agreements whereby all of these companies agreed secretly not to poach or cold-call each other's workers," said Mark Ames, senior editor of PandoDaily.
A probe by the U.S. Justice Department in 2010 revealed that several companies agreed to keep do-not-call lists and shared confidential salary information to prevent bidding wars, reports CBS News' Carter Evans. They settled the anti-trust complaint, but now Apple, Google, Adobe and Intel are the target of a civil lawsuit by employees seeking $3 billion in damages.
"Their position is, 'We should have made more money, and but for your agreement we would have made more money someplace else.' And that's going to be a difficult thing for the plaintiffs to prove at this trial," said Lauri Mazzuchetti, a class-action defense expert.
In 2005, Silicon Valley was trying to re-boot after the tech crash. Companies pooled their brightest minds on shared projects. Court documents revealed that when Google tried to hire away an Apple engineer, the late Steve Jobs fired off an e-mail to Google saying, "If you hire a single one of these people that means war." After another complaint by Jobs, Google fired the offending recruiter.
"Undoubtedly the biggest villain is Steve Jobs," Ames said. "Without Steve Jobs' force and bullying, I doubt this would have gone off the ground. I mean it becomes clear with just about everybody involved, every CEO who agrees with this arrangement. They understand it's illegal and they're generally scared of Steve Jobs, and he's not scared of anyone or anything."However, Jobs failed to get Facebook to bite the apple. Executive Sheryl Sandberg repeatedly refused to join the non-poaching agreements. Facebook, Apple and Google declined to comment. With billions of dollars and loads of bad PR at stake, many following the case predict a settlement before next month's trial.