Northern District of California Judge Lucy Koh refused to dismiss In re: High-Tech Employee Antitrust Litigation, a case in which the plaintiffs allege that agreements among hi-tech companies to not steal each other’s engineers.
In 2010, the Antitrust Division entered a consent decree with Apple, Pixar, Google, Intel, Adobe Systems, Intuit, and Lucasfilms concerning a federal antitrust claim that the companies had agreed not to cold call each others’ engineers.
The defendants argued that alleged parallel conduct alone cannot establish a conspiracy and argued that the plaintiffs had failed to allege anything more than individual similar bi-lateral agreements. The court found, however, that all six separate agreements involved deceased Apple CEO Steve Jobs, which she concluded was alone enough to block an immediate dismissal. “It strains credulity,” Judge Koh explained, “that Apple and Adobe reached an agreement in May 2005 that was identical to the … agreement Pixar entered into with Lucasfilm in January 2005 without some communication or coordination between these two sets of defendants.” Moreover, she emphasized that “[t]he identical nature of the six secret bilateral agreements further support[ed] the plausible inference that the agreements were negotiated, reached and policed at the highest levels of the defendant companies.”
Even if the agreements were not connected, the court concluded, even two-party agreements can restrain competition. “It is plausible to infer that even a single bilateral agreement would have the ripple effect of depressing the mobility and compensation . . . ”
Discovery, which had been stayed since the motion to dismiss was filed, will now resume.