Judge Questions Proposed Silicon Valley Hiring Collusion Case Settlement

The late Steve Jobs and Google's Eric Schmidt
over coffee in Palo Alto, California
(Image: gizmodo.com)

For all of Silicon Valley's talk about "innovation," "free enterprise," and "disruption," its major corporate players worked hard to keep each other from poaching its respective work forces. A number of years ago, a handful of affected individuals filed a class action lawsuit alleging widespread employer collusion in the Valley. The goal of the unwritten, but well-known and thoroughly understood policies was to keep a lid on the employee compensation a genuinely free labor market would have generated. The culprits, according to the litigation, included, among others, the sainted Steve Jobs, the revered Google, and the former gold standard for tech worker bliss, Hewlett Packard.

Recently, representatives for the plaintiffs reached a settlement for over $300 million with a number of Valley heavyweights. According to a story in siliconvalley.com, the case's presiding federal judge has threatened to pull the reins on the settlement's momentum. Judge Lucy Koh harbored doubts that the settlement was in the plaintiffs' better interest.

Oops. Keep in mind that Silicon Valley's star firms have been promoted as the apogee of employment desirability. The President of the United States, a parade of major media "content providers," and the Valley's heavy hitters themselves have sung the praises for high tech's A-team. Now, a court case has brought clarity to the Valley's old school collusion that effectively stifled "innovation," frustrated legitimate free market operations, and worked overtime to avoid "disruption" to its hiring and retention models.

Guess some things just don't change, after all.