A former employee of Oracle has sued the company for allegedly conspiring with Google to prevent poaching of certain categories of managers from each other, in a bid to keep salaries low.
Oracle's restricted hiring agreement with Google was part of a bigger conspiracy by technology companies, located mainly in Silicon Valley, that prevented solicitation of each other's managers, according to a class action complaint from Greg Garrison, who handled sales of Oracle's Crystal Ball software from about December 2008 to June 2009.
The tech companies put each other's employees off-limits to other companies by introducing "do-not-cold-call" lists and required companies to inform each other before hiring the other's employees, according to the complaint Tuesday in the U.S. District Court for the Northern District of California, San Jose division.
The elimination of competition and suppression of compensation and mobility had a "negative cumulative effect" on all class members, according to the complaint.
Seven companies settled similar charges in 2010 with the U.S. Department of Justice while admitting no wrongdoing, but agreed not to ban cold calling and enter into any agreements that prevent competition for employees. These were Google, Apple, Intel, Adobe Systems, Intuit, Lucasfilm and Pixar.
Attorneys for Google, Apple, Adobe and Intel appealed in September a decision by the California court to throw out a proposed US$324.5 million settlement in a class-action lawsuit by technology employees. District Court Judge Lucy Koh found the amount was too low. Intuit, Lucasfilm and Pixar had previously settled for about $20 million.
In his complaint, Garrison said that the restrictive hiring agreement between Oracle and Google was first publicly disclosed in a filing in the California court in May last year. The companies agreed not to pursue manager level and above candidates from each other for product, sales, or G&A (general and administrative roles), even if they applied for jobs, according to the complaint.
Oracle could not be immediately reached for comment.
Garrison has asked the court for class certification and a jury trial besides triple damages from Oracle, among other things.
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.