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Google, Apple offer millions in court battle over wage suppression

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Cathal McNaughton/Reuters/File

(Read caption) The Google offices in Dublin. Google, Apple, and several other tech companies are settling a lawsuit that alleges secret no-poaching policies that hurt software engineer's mobility and pay.

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Silicon Valley boasts some of the best companies in the world enclosed in a small geographic area. It's a dream locale for a tech worker who wants to start off at Apple, but wouldn’t mind jumping to Google, or one of the other huge and successful tech companies in this region of northern California.

However, this week, Apple, Google, and other major companies are facing a lawsuit that accuses the companies of secret agreements not to poach each others’ talent.

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This in turn hurt employees chances for mobility and higher wages to these companies’ benefits. If true, the no-poaching agreement might violate antitrust laws and tarnish the image of these tech companies, which are routinely voted as some of the best workplaces in the world.

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Apple, Google, Intel, and Adobe have offered up a joint payment of $415 million to settle the case, according to sources speaking to the New York Times. This comes after a U.S. District Judge Lucy Koh rejected their initial deal to pay $324.5 million to more than 60,000 software engineers who are class-action plaintiffs in the case, alleging the deals blocked potential job offers. One of the named plaintiffs, Michael Devine, said the initial settlement wasn’t enough.

With that being said, even $415 million is hardly a dent in these behemoths' earnings and each plaintiff would only receive several thousand dollars in compensation. What could hurt the companies more is damage to their reputations as worker-friendly companies.

Google and Apple’s sprawling Silicon Valley campuses offer employees gourmet meals, fitness classes, on-site wellness centers, and even nap pods. Their benefits include generous parental leave and education reimbursements. These perks have landed both at the top of “Best Companies to Work For” lists for nearly all the years they have been in existence. However, if the case goes to trial, this could significantly tarnish that employee-first image.

The lawsuit came about after a Justice Department investigation into Google, Apple, Intel, Intuit, Adobe, Pixar, and Lucasfilm that rendered antitrust complaints. Pixar, Lucasfilm, and Intuit settled in 2013 for a total payment of $20 million.

If a settlement agreement is not reached, the case will go to trial in San Jose this spring.