
Google and Apple in $415M 'non-poaching' settlement offer - pierre-renaux
http://www.bbc.com/news/technology-30843644
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billyhoffman
It is a mistake to view the settlement through the lens of "$X paid per
person."

These companies colluded to depress the wages of an entire industry. "50,000"
people were not effected. "64,000" people were not effected. Those numbers are
just the work forces of the companies involved in the lawsuit.

The entire greater Bay area technology job sector, one of the highest paid
jobs in America, in the region of its highest concentration, was artificially
depressed. These companies put a ceiling on what a given job was worth. If you
work in Silicon valley in technology, you were effected. The ability to moved
to another company and get paid what you are worth was effected.

The shear scope and damage these companies did is almost beyond belief. We are
not talking hundreds of millions of dollars. We are talking Billions and
Billions.

The ripple effects are even crazier. How many new technology companies did not
get created because people's depressed salaries reduced how much they could
save to bootstrap something new? How much did technology workers not spend
into the service industry or the larger economy, because they were underpaid?

This is a staggeringly insidious act with wide reaching repercussions beyond
Adobe poaching some PhDs from Google, or vice versa.

~~~
bradleyjg
I agree that there were larger, diffuse consequences for a great many people,
but the mass tort system isn't really designed to remedy that kind of thing.

The most appropriate mechanism for that is government action. There was such
an investigation, and it did find wrongdoing, but the ultimate response was so
feeble as to be meaningless. The DOJ sued the tech companies under the Sherman
Antitrust act which reads in part:

 _Every person who shall make any contract or engage in any combination or
conspiracy hereby declared to be illegal shall be deemed guilty of a felony,
and, on conviction thereof, shall be punished by fine not exceeding
$100,000,000 if a corporation, or, if any other person, $1,000,000, or by
imprisonment not exceeding 10 years, or by both said punishments, in the
discretion of the court._

After filing suit, the government settled the case in exchange for a promise
not to violate the law for five years. Given that they were already obligated
to follow the law, and not just for five years, one wonders what the point
was.

~~~
sitkack
> but the mass tort system isn't really designed to remedy that kind of thing.

I'd say prison could be a great remedy for that sort of thing.

~~~
pjungwir
I was very disappointed not to see prison sentences for executives and other
fiduciaries in the 2008 financial scandals. Weren't those used in the 80s S&L
crisis? I understand that large corporate penalties can hurt society or
innocent employees, but we can still deter bad behavior if we hold individuals
accountable. Of course the rich will always be more likely to evade justice,
but I feel like 2008 was more blatant than usual and sent a strong message
that if you're rich you can act with impunity.

~~~
anigbrowl
So am I, but look at the vitriolic 'class warfare' narrative that opponents of
the administration have been carrying on for the last 6 years. Every time the
government makes a bank pay out money to settle accusations of financial asset
misrepresentation (eg some of the shenanigans around mortgage-backed
securities), the Wall Street Journal and its ilk wax wroth about 'government
shakedowns' and so forth. So imagine the response if the DoJ launched criminal
prosecutions of big bank CEOs in addition to fraudsters like Bernie Madoff -
there would be cries about a communist takeover and what-all else.

It's also true that the regulatory environment was sufficiently lax, and the
chain of responsibility sufficiently convoluted, that it would have been hard
to make any such prosecutions stick. Financial crime is generally slow to come
to trial anyway because it's so hard to prove intent beyond a reasonable
doubt, and so hard to pin it on any individual in a sufficiently large
organization. As well as (possibly) leading to political upheaval and
(definitely) causing a major chilling effect on business activity in the
middle of the worst financial crisis in almost everyone's living memory, it
would have been ethically, legally, and strategically problematic to bring
charges that would not be easily provable at trial. If the CEO of (imaginary)
MegaBank had been put on trial and the case collapsed, it would have poised
every other prosecution for 20 years. That's not rational, but at the national
level prosecutions have a big political dimension, there's just no getting
away from it.

My read is that the administration opted to go the route of administrative
penalties with the twin goals of maintaining relative stability in the
financial industry and getting Dodd-Frank passed on congress to provide much
stronger regulatory options for the longer term. It's not an emotionally
satisfying strategy, but a pragmatic one taken in the interests of continuity.
I would have preferred a top-to-bottom shakeout of the financial industry, and
maybe a change in the economic and social order that would result, but the
problem with revolutionary changes is that once begun it's hard to stop them
turning. Look at the French revolution; half the instigators ended up on the
guillotine themselves and 10 years after France had got rid of a king they
ended up with an emperor.

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kolbe
Cost of a chat service company with 55 employees:..........................
$19,000,000,000

Cost of systematically colluding to depress the wages of employees:.......
$415,000,000

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adevine
Yeah, this seems silly to me. Judges very rarely reject settlement offers, so
if 324.5 million was deemed so low as to reject the settlement, bumping it up
a bit to 415 doesn't make much of a difference.

~~~
EC1
What planet do you live on where $100m is chump change?

~~~
tomp
Well, if the size of the class is 50000 workers, that amounts to about 2000
per worker... about a weeks wage?

~~~
wyldfire
Who's eligible for the class? Only employees of those corporations? Or the
tech/engineering marketplace at large?

~~~
Timothee
My understanding is that it's only people who were employees of these
companies at the time, though it's easy to argue that anybody in the tech
industry was indirectly affected.

I.e. the salary paid to these employees influences the salary expected to be
paid to people doing the same at a different company. Especially considering
the size and importance of the companies involved. Strangely, I haven't seen
this discussed much in articles about this scandal. (of course I say that as
someone who did _not_ work at any of the involved companies)

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rewqfdsa
$415 million is still pitifully low. At what point will the judge just force a
trial?

~~~
Igglyboo
Seriously, it needs to be 10x this to makeup for all the money they saved, and
100x this to make sure they never do it again.

~~~
loceng
$41.5 billion? Yup, that'd probably stop any companies from trying this again.

~~~
atburrow
$4.15 billion.

~~~
tartuffe78
$4.15 billion would be 10x, and $41.5 billion would be 100x

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smackfu
Remember that it's a settlement to avoid a trial. The settlement amount is
going to be somewhere in between $0 and the real damages, modified by the odds
of winning the trial. Additionally, the lawyers in a class action have a real
aversion to going to trial, since they are working on contingency and get
nothing if it goes to trial and they lose. That should drive the settlement
offer down too.

~~~
jacquesm
It would seem then that that is an excellent reason to litigate this on your
own rather than through a class action.

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chmartin
The evidence is the email. A crime was committed. forget the settlement, the
CEOs need to go to jail

~~~
walshemj
just ban them from being director for 10 years - you have sacked yourself and
all those options that haven't vested back to the company they go.

Or start enforcing the fit and proper persons test for senior managers.

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yuhong
I really hope Apple/Google will do admission of wrongdoing with an apology
letter, as I suggested before.

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bluecalm
There aren't many things you can do to make people worse off at that scale.
It's 50-60k employees and hundred thousands more affected by this to some
extent. I mean, if you rob a supermarket or a bank it's like a drop in the
ocean damage comparing to what executives at Google and Apple did. Why aren't
people involved prosecuted, jailed or at least permanently removed form any
positions of power and/or influence ?

Every time I read this emails it's my "I don't want to live in this world any
longer moment". I mean some of those "I don't want to leave paper trail we can
be sued over" people are still in prominent positions today.

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droopybuns
I want to see executives in jail over this.

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billpg
"Poaching"?

Do they see their employees as property or something?

~~~
canvia
resources to be utilized as "efficiently" as will be tolerated

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dsugarman
This is horrible timing with Immigration Reform. The incorrect argument that
tech companies want reform to keep wages low is going to get a lot of fuel if
they don't agree to a reasonable settlement soon. The long term effects of
letting highly skilled immigrants in to join and start companies on the tech
industry is an order of magnitude higher than paying a couple $b to right the
wrong for Google and Apple.

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afking
Is this not Capitalism? Lowering costs. If your worth more then what you are
getting paid, quit? Ask for a raise? Seems bad to expect companies to just
drop fantastic paying jobs into your laps.

Government regulation to increase wage prices, seems like communism.

~~~
ForHackernews
No, capitalism is supposed to involve companies competing with one another
(including competing for employee talent), not colluding with their nominal
competitors. That's an oligopoly or cartel and it's a market failure similar
to a monopoly.

~~~
igonvalue
I agree with the spirit of what you're saying, but I think it's more accurate
to call what you're describing a "free market" than "capitalism"; the latter
does not in fact preclude market failures such as oligopolies/cartels.

