Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

The Economics Of A Free Lunch: Settlement Hides How Silicon Valley's Richest Companies Conspired Against Their Workers

Posted by Tom Foremski - May 12, 2014

Facebook  1 of 1

1, Hacker Way, Facebook HQ - It refused to join the conspiracy.

I'm surprised there hasn't been more outrage at Silicon Valley's richest and most successful companies secretly conspiring against their own staff. Especially when they constantly talk about how they value their engineers(!)

It's a shame the class action settlement won't reveal the true nature of their duplicity. From today's New York Times, David Streitfeld reports: 

"There was such embarrassing evidence about the pacts being orchestrated from the very top, and there was such hubris from Jobs and the other chief executives," including Eric E. Schmidt of Google and Paul S. Otellini of Intel, said Orly Lobel, a professor of employment law at the University of San Diego. "It would have been very unpleasant for the companies to reopen all those emails in court."

. . .

Michael Devine, a 46-year-old freelance programmer who is one of the four plaintiffs named in the suit, thinks the companies are getting off far too lightly.

. . .

Apple has more than $150 billion in the bank, eclipsing the combined cash reserves of Israel and Britain. Google, Intel and Adobe have a total of about $80 billion stored up for a rainy day.

Against such tremendous cash hoards, $324 million is chump change. But that is what the four technology companies have agreed to pay to settle a class action brought by their own employees.

. . .

 "The tech industry is ethically challenged," Mr. Devine said. "Customers and the government don't fully understand technology and therefore don't know when the law is broken. I'm attracted to the industry for the opportunities for innovation but repulsed by the ease with which folks can cheat and get away with it."

Plaintiff in Silicon Valley Hiring Suit Maligns Deal - NYTimes.com

Open up those embarrassing emails. And how do we know that these long standing practices in hiring haven't become institutionalized over time?

A free lunch and a ride to work do not compensate for damaged careers because employers colluded to hold down their employees' potential. It's difficult to believe.

Here is an extract of Devine's letter opposing the class action settlement:

The evidence of the Defendants' illegal conspiracy, and its intended impact, is very strong. In fact, the Defendants' own actions reveal their valuation of the conspiracy. Just look at Google which, when Facebook rejected their illegal overture, felt compelled to raise annual compensation 10% companywide to stem the flow of employees to Facebook. This settlement, in contrast, will amount to less than 1% of compensation for each class member over the duration of the illegal agreements. That's one tenth of the experts' estimates of damages and is lacking in any penalty. There's no justice for the Class in that, nor is there any real deterrent to future wrongdoing. We want a chance at achieving real justice.

As an analogy, if a shoplifter is caught on video stealing a $400 iPad from the Apple Store, would a fair and just resolution be for the shoplifter to pay Apple $40, keep the iPad, and walk away with no record or admission of wrongdoing? Of course not, nor is such a resolution appropriate in our case. Perhaps, though, the prevalence of corporate crime is in part due to the absence of real justice for the victims in the courtroom? Why, with such uniquely compelling evidence in hand, would we short circuit this case? Please, Your Honor, allow us our day in court.

Tech Worker Justice

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