When the free market is allowed to run its course, it should, in theory, benefit employees as much as it benefits consumers and producers. However, when large companies in the same field band together to keep their costs low, their employees often end up paying the price.
Such was the case when Apple and Adobe allegedly agreed not to cold call each others’ employees. Cold calling is standard practice in many areas of business. An employee may get a call from another company with an offer to apply for a job opening. In this way, the employee would get to find out the kind of salary and benefits that another company would offer them for performing the same, or a similar, job. Even if the employee decides not to take the job, they may use the information that they glean from the cold call to negotiate a higher salary or better benefits with their current employer. Furthermore, even employees who do not receive cold calls may choose to leave their company if they learn of better opportunities through coworkers who do receive cold calls from competitors.
Since many companies invest a fair amount of time and resources into getting good employees, and replacing those employees can be costly and time consuming, it is in the company’s best interest to prevent their employees from leaving to find other employment. In anticipation of these cold calls, many employers make sure to pay their employees a handsome salary and good benefits. However, beginning in 2005, Apple allegedly found another way around this problem. Apple allegedly formed a “Do Not Call” agreement with Adobe in which the companies agreed not to cold call each others’ employees. If an employee of one company applied for a position with the other, the potential employer agreed to contact the current employer to warn them. If the current employer chose to, it could then negotiate to keep its employee. Both companies also agreed not to outbid each other with high salaries.
As evidence that the agreements lowered salaries, the complaint points to the result of Facebook cold calling Google engineers. Arnnon Geshuri, the Recruiting Director for Google at the time, called Facebook’s COO, Sheryl Sandberg, to ask her to stop the cold calling and to establish a mutual “Do Not Call” agreement. Facebook refused and continued to poach employees from Google. As a result, Google increased salaries for its employees by 10% and added an immediate cash bonus of $1,000 for its employees. This set off a chain reaction, which led to Apple also raising salaries for its employees.
The “Do Not Call” agreement allegedly grew to include Google, Pixar, Lucasfilm, Intel, and Inuit. A class action of employees has since been filed against all of these companies, alleging that their “Do Not Call” agreements kept employees’ salaries artificially low.
The defendants in the lawsuit have argued that the case cannot be litigated as a class action due to the variations in compensation between employees. However, according to law, even if the compensation varies, if the employees all suffered as a result of the same illegal business practice, a court can decide that the class members had sufficient commonality to justify certifying a class action. Such was apparently the case when US District Judge Lucy H. Koh granted the plaintiffs’ motion to certify the class. The class includes more than 50,000 current and former salaried employees of the tech giants.
he Chicago class action lawyers at the Chicago Overtime Law Center are investigating unpaid overtime claims by waiters and bus boys and other restaurant and hotel workers against national restaurant chains including Chipotle, Red Lobster, Olive Garden, Outback Steak House, Taco Bell, Burger King, Wendy’s and hotels for misclassifying employees as managers or assistant managers, forcing employees to work off the clock at business, failing to share all tips, erasing or altering time sheets or time records, pressuring workers not to report or record overtime, and otherwise failing to pay workers for overtime and other wages. If you are the victim these wage theft practices call us at (312) 869-4095 or contact us online.
The Chicago class action attorneys at the Chicago Overtime Law Center have three decades of experience fighting to help employees who are victims of wage, overtime and tip theft by their employers. We have a team of Chicago unpaid overtime lawyers who concentrate on prosecuting state and nationwide class action lawsuits. Our attorneys work out of Chicago and Oakbrook offices and pursue claims for workers all over the Chicago area including Joliet and Naperville. We protect unpaid workers who haven’t received overtime throughout the Chicago area including in DuPage, Lake, McHenry, Kane and Cook Counties.
Our Wheaton and Rockford overtime lawyers are intimately familiar with the issues that arise during wage claim litigation, and we know the laws that govern overtime cases well. Many employers misclassify employees as being exempt from overtime laws and pay workers salaries instead of hourly wages in order to avoid paying them overtime. Some employers mistakenly classify employees as exempt and others intentionally do so in order to circumvent the law. In either case, workers do not receive the wages they should, and a lawsuit may be the only way to recover their earned wages.
The Chicago Overtime Law Center is based in Chicago, and represents clients throughout the country who have not been paid for the overtime hours that they worked. If you believe that you are owed overtime wages, contact one of our Chicago class action attorneys by phone at (312) 869-4095 or through our online form.