• At Kemp Little, we are known for our ability to serve the very particular needs of a large but diverse technology client base. Our hands-on industry know-how makes us a good fit with many of the world's biggest technology and digital media businesses, yet means we are equally relevant to companies with a technology bias, in sectors such as professional services, financial services, retail, travel and healthcare.
  • Kemp Little specialises in the technology and digital media sectors and provides a range of legal services that are crucial to fast-moving, innovative businesses.Our blend of sector awareness, technical excellence and responsiveness, means we are regularly ranked as a leading firm by directories such as Legal 500, Chambers and PLC Which Lawyer. Our practice areas cover a wide range of legal issues and advice.
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  • Our team provides practical and commercial advice founded on years of experience and technical know-how to technology and digital media companies that need to be alert to the rules and regulations of competition law.
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  • At Kemp Little, we advise clients in diverse sectors where technology is fundamental to the ongoing success of their businesses.They include companies that provide technology as a service and businesses where the use of technology is key to their business model, enabling them to bring their product or service to market.
  • We bring our commercial understanding of digital business models, our legal expertise and our reputation for delivering high quality, cost-effective services to this dynamic sector.
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  • Our clients trust us to apply our solutions and know-how to help them make the best use of technology in structuring deals, mitigating key risks to their businesses and in achieving their commercial objectives.
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  • Kemp Little is trusted by some of the world’s leading luxury brands and some of the most innovative e-commerce retailers changing the face of the industry.
  • HR Bytes is an exclusive, comprehensive, online service that will provide you with a wide range of practical, insightful and current employment law information. HR Bytes members get priority booking for events, key insight and a range of employment materials for free.
  • FlightDeck is our portal designed especially with start-up and emerging technology businesses in mind to help you get your business up and running in the right way. We provide a free pack of all the things no-one tells you and things they don’t give away to get you started.

Silicon Valley giants tied up in wage fixing suit

Four of the world’s largest technology companies hit the headlines recently when they settled a class action brought in the US by over 64,000 employees for the eye-watering sum of $324 million, but the settlement was later overturned in the Courts.

The claim was lodged in the US on behalf of engineers, programmers, digital artists and other technical staff employed by Apple, Google, Intel and Adobe Systems.

The employees alleged that between 2005 and 2009 the firms had secretly agreed not to solicit (or even hire) one another’s staff, in order to prevent a salary war from escalating in Silicon Valley. The Employees claimed that this restricted their ability to move between the companies, reducing competition and in suppressing wages.

Such “employer cartels” are illegal in the US due to the effect that they have on workers’ freedom to compete. The employees sought a total of $3 billion in damages against the four companies in respect of lost earnings.

The companies eventually professed to having made some no-hire agreements, but strongly disputed that their intention was to keep wages down. However, one of the more telling pieces of evidence uncovered was an email from Eric Schmidt (Google’s executive Chairman) in which he stipulated that any ‘no-cold call’ agreements they had with competitors shouldn’t be written down, implying some awareness that the agreements were not legal.

The case was closely watched by the media (in the US and abroad), particularly as the companies were facing damages of up to $9 billion under US antitrust laws if the courts found against them.

The parties almost reached an agreed settlement of $324.5m in May 2014, a few weeks before the hearing was due to take place – this worked out at roughly $5,500 per employee, which is fairly trivial when you consider the savings made by the companies in terms of wages between 2005 and 2009.

However, US Judge Lucy Koh rejected the settlement deal, saying it fell "below the range of reasonableness". In her view, the tech companies should pay the employees at least an extra $50 million more than the proposed settlement sum.

Many will now been watching this space, to see whether the Silicon Valley giants decide to raise their settlement offer or face a trial.

It would be interesting to see whether such a claim could get off the ground in the UK. Whilst we’ve not seen a claim like this to date, changes in class actions and to competition laws mean that such claims could be easier in the future. It’s also interesting to consider that if the companies had been based in the European Union they could been fined as much as 10% of their entire global turnover (which is roughly $60 billion combined) under European competition laws, making $380 million seem, in the grand scheme of things, like a pretty good deal.

To make matters more complicated, the estate of Apple founder Steve Jobs is now being sued directly by the company's shareholders – they are claiming that he damaged the value of the company by striking these controversial hiring agreements with the other organisations. The amount being sought by the shareholders has not yet been reported, but given that Apple's stock is currently near an all-time high it’s hard to see how they will be able to show any significant losses resulting from his actions.

For further information please contact Kathryn Dooks.