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Recent High Tech Employee Settlement Could Impact Future Non-Compete Litigation

On Behalf of | Apr 30, 2014 | Employment Law

A recent settlement occurred in which Apple, Google, Intel, and Adobe agreed to pay $324,000,000 to employees based on claims that the companies conspired to suppress salaries by not hiring each others’ workers. See the Bloomberg Business Week article here. This settlement provides those who are defending their former employer’s attempt to enforce a non-compete through an injunction an additional issue to discuss with the court. The equitable argument is that the employer has severely restricted the employee’s opportunities outside of that employer because of the non-compete and therefore has created a situation where the employer need not treat the employee as the market would otherwise require in order to retain him. While the settlement addressed allegations of “do not hire” agreements between these major high tech companies which provided them the opportunity to enable each of them to have more leverage over their employees when negotiating compensation, a non-compete agreement between the employer and the employee may effectively have the same affect. Obviously agreements between such high tech giants such as Apple, Google, Intel, and Adobe have far more reaching anti-trust implications than an agreement between an employee and a small to medium-sized employer, yet the argument that such an agreement inappropriately allows the employer to treat its employees as a captive audience could give a judge another reason to determine that enforcing the non-compete against the employee would not be equitable.

J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at [email protected].