The week before Labor Day, a federal judge in Silicon Valley
signed off on a record $415 million class-action settlement
against Apple, Google, Intel, Disney, and six
other digital-economy giants accused of collaborating to suppress
the pay of 65,000 software engineers, designers, app developers,
and other tech pros who worked there in the late 2000s.
At the center of the scheme was Apple's late
founder Steve Jobs, depicted by workers and
witnesses as coordinating the multi-company noncompetition
agreement to stop luring one another's prized tech minds to
Google CEO Eric Schmidt agreed to fire
recruiters when Jobs complained they were offering to pay his
people more, according to testimony and emails that U.S.
District Judge Lucy Koh found credible enough to take the
case to trial.
Not all of the CEOs rolled over for Apple. Palm
boss Ed Colligan told Jobs that his
pay-suppression scheme, and Apple's threat to challenge his much
smaller company's patents if he didn't play along, were "wrong" and
"illegal." In a free market, Colligan suggested, "it's inevitable
that we will bump into each other" hunting talent.
The Justice Department investigated, ordered
the companies to stop - and followed the usual Obama-era practice
of not hitting powerful domestic interests too hard. No criminal
charges. No compensation. So workers sued.
"You had these high-tech companies fighting with each other in
the free market to create the best products with the lowest prices
- yet, when it comes to dealing with their own employees, they'd
rather not compete, because that's expensive,"
lawyer Eric L. Cramer, a managing shareholder at
Philadelphia-based Berger & Montague P.C. who
represented some of the workers, told me.
It wasn't just stars Big Tech tried to hard-wire to their desks.
"We were able to show a vast group of employees were affected by
these agreements," Cramer said.
Curbing this cozy wage suppression hasn't stalled the i-Profit
machine. Apple earned $35 billion in the years covered by the suit,
2005-10. It expects to earn more than $50 billion this year
Americans have wondered why Apple, the most valuable U.S.
company, relies so much on cheap foreign factories and labor. Apple
has said from time to time that it would try harder to source
In 2013, then-Pennsylvania Gov. Tom Corbett
announced that one of Apple's lead suppliers - Hon Hai
Precision Industry Co., also known
as Foxconn - "plans to invest $30 million" over
the next two years "to establish a high-end technology management
facility," and would choose a site somewhere in the state at a
distance from its small former AMP Inc. testing
facility near Harrisburg.
Where's the $30 million factory? Nowhere, apparently: Two years
later, Foxconn has not followed up with the state programs tapped
to help site and finance a facility, state
spokeswoman Lyndsey Kensinger and other state
officials told me.
Foxconn officials in Taiwan and at its U.S. headquarters did not
reply to inquiries. (Foxconn also promised $10 million for research
at Carnegie Mellon University. I couldn't get
officials there to say they'd gotten the money. Foxconn is,
however, a cosponsor for a student robotics team there.)
None of this surprises Mike Buetow, who has
written about other vaporous Foxconn promises
"Foxconn has been the subject of several related stories touting
astronomical sums of future investment, none of which have come to
pass," Buetow told me. He cited a string of $100 million-to-$1
billion investments the company pledged in prior years
in Brazil, Vietnam, and Indonesia, and plants the
company said it would build in Colorado, Louisiana,
and four other states. Still waiting.
In July, Foxconn promised to create a million jobs
in India. "I'd put the odds at a million to one,"
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