/ Xeni Jardin / 5:12 pm Thu May 26, 2011

California lawsuit accuses Apple, Google, Adobe, and others of fixing worker pay

A lawsuit filed in California accuses Adobe, Apple, Google, Intel, Intuit, Lucasfilm, and Pixar of violating antitrust laws by conspiring to fix employee pay, and agreeing on "no solicitation" deals with one another. Executives from the aforementioned companies "entered into an interconnected web of express agreements to eliminate competition among them for skilled labor," the suit charges. (CNET)

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  2. Oh man this sucks. What these big guys pay their skilled workers tends to set the bar for pay in the sector.

  3. Welcome to the corporate hegemony.

    “Free Market” my ass. There has never been and will never be anything like a “free market”. The faster we accept that reality the better off we will be.

  4. mfw capitalism happens

    This is why I tell people unions are important. If we had an economy and workforce that necessitated competition among employers for employees, then unions would serve no ethical purpose as far as I or Adam Smith are concerned.

    But we do not live in such a time.

  5. Does this mean that all of the poorly paid employees at that company should actually be making more? [sarcasm]

    1. Better yet, why does Intuit even exist? With a more sensibly designed tax system, we wouldn’t have to pay someone money… so we can pay someone else money…

  7. Our whole society is circling the drain. I can hear the giant sucking sound (not to be confused with that OTHER giant sucking sound). :)

  8. The agreements were just not to cold call each others’ employees. The only people who have been damaged are those unhappy in their jobs but whose sense of entitlement was so large that they expected job offers to roll in unsolicited instead of seeking them out themselves.

    1. According the the DOJ it went beyond not cold calling:

      In a Complaint it filed as part of the arrangement with Lucasfilm, the Antitrust Division charged that Lucasfilm and Pixar “entered into an agreement not to cold call, not to make courteroffers under certain circumstances, and to provide notification when making employment offers to each other’s employees.”

  10. I read the article and came away with the idea that the 10-15% reduction in employee pay was an estimate (by the plaintiffs) of the effect of companies not cold-calling each other’s employees.

    I know companies (like one I used to work for) tend to lowball prospective hires who can get another 10-20% just by asking for it, but this is really sleazy.

    In the lawsuit, the second and third complaints are the real scary parts. Anyone looking to leave one of the named companies, especially during performance review period, will naturally want to keep it quiet. Companies want loyalty (though they seldom return it), and bosses take a dim view of restless employees.

    So if another of the companies makes a not very attractive offer and then rats the employee out to his or her boss, that worker is screwed. The other company and the first company agreeing not to make a better offer or counteroffer, respectively, is adding insult to the injury of a likely future of mysteriously bad performance reviews.

  11. As a result, Pixar is notorious for being the lowest paid feature animation studio. Disney, Dreamworks, Sony and Blue Sky all pay better.

  12. Much of this problem comes about due to a system based on authority ranking rather than contribution to profitability. It assumes that executives should be paid more than engineers because they have authority over engineers. The idea that someone you manage may get paid more than you is a bitter pill to swallow for most executives. They will happily collude with other companies to keep that from happening. A better model to use in these industries would be similar to a football team. The coach may have authority over the star players, but the star players get paid more because they make a greater contribution to the team’s success. A system based on contribution to profitability (talent!) would create a compensation curve among employees with a peak rising out of the middle, unlike the gradual curve from top to bottom of the org chart.

    1. No, it is not. This is a free market fail. Fines will be paid to regulators with no admission of wrongdoing,

      What’s the deterrent? It is the inevitable class action civil suit, which the companies will probably lose since they just pissed off a lot of people making 6 figures.

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