The Justice Department once accused Silicon Valley tech giants of conspiring not to poach employees from one another, and eventually they agreed to pay more than $400 million to settle a class-action lawsuit related to those accusations. Now, as Silicon Valley grapples with antitrust talk and challenges to its dominance, a new documentary revisits the almost decade-old case — and its relevance to today.
“When Rules Don’t Apply,” a nearly half-hour documentary, will be shown at a free premiere event in San Francisco next week. It is available online now.
Among the evidence the film resurfaces: emails between the late Apple CEO Steve Jobs and former Google CEO Eric Schmidt in which Schmidt agrees that Google should not be recruiting Apple employees; a Google list that deemed some companies “sensitive,” meaning their employees were off-limits; and emails that showed the companies were trying to keep their agreements quiet.
The case against those tech giants, plus eBay, Intuit, Intel, Adobe, Pixar and Lucasfilm, was one of the first to apply antitrust law to businesses colluding in a labor-rights case, said Veena Dubal, a professor at UC Hastings College of the Law and one of the narrators of the documentary.
“Steve Jobs wanted to keep his employees, but he didn’t want to pay to retain them,” she said in the film.
Although Gene Kimmelman, chief counsel for competition policy for the DOJ, said in the film that his department found “naked violations of antitrust laws,” the government issued no fine. But in 2015, the tech companies reached a settlement of more than $400 million in a $3 billion class-action lawsuit. That worked out to about $5,000 each for the 64,000 employees affected.
The companies, which admitted no wrongdoing, “basically just got a slap on the wrist,” said Neil Haran, a former Lucasfilm engineer and a plaintiff who was also featured in the documentary. He later said he expects companies to “do it again.”
The film includes many different voices, such as that of AnnaLee Saxenian, dean at the School of Information at UC Berkeley.
The companies “had a moment of public embarrassment and shame,” she said, but “I wish I saw that it provided a deeper lesson.”
But Donald Polden, emeritus professor of law at Santa Clara University and an adviser to the film, said in an interview this week that since Silicon Valley’s infamous no-poaching case, “now it’s much clearer that suppression of workers’ wages through anticompetitive agreements violate antitrust laws.”
Polden is well aware, though, that tech companies are facing antitrust pressure today over a variety of issues, both here in the United States — where presidential candidates and others are calling for them to be broken up — and elsewhere, such as in Europe, whose regulators have handed down fines.
He said the question of whether today’s tech giants are violating antitrust laws is interesting, because “antitrust laws are intended to spur innovation, and these companies are still doing that.”
David Donnenfield is director and producer of “When Rules Don’t Apply,” which was funded by a 2015 settlement between eBay and the state of California over the company’s hiring and recruiting practices. He pointed to the similarities between the Gilded Age, when the Sherman Antitrust Act was enacted before the turn of the 20th century, and now.
“Some people refer to this as the second Gilded Age,” he said in an interview this week. “Folks at the top are exerting disproportionate influence on a democratic system, compared to people barely hanging on in the middle class.”
Antitrust “doesn’t get enough play,” said Donnenfield, who also directed another documentary about antitrust, “Fair Fight in the Marketplace,” which was released in 2007. “Competition is so fundamental and elemental that it really impacts our way of life.”
A discussion about how antitrust law applies today, featuring panelists from the Tech Workers Coalition, UC Hastings College of the Law and the plaintiffs’ lawyers, will follow viewing of the film Thursday.
“WHEN RULES DON’T APPLY”
Online: www.whenrulesdontapply.com
Premiere: May 30, 6-9 p.m., UC Hastings College of the Law, San Francisco
