By Kartikay Mehrotra, Bloomberg News
LG Corp. and Samsung Electronics Co. were accused in a lawsuit of conspiring to suppress wages by agreeing not to recruit each other’s employees in Silicon Valley, where allegations of no-poaching pacts have haunted technology companies for years.
A former LG sales manager claims the South Korean electronics makers had a “long-standing agreement” not to “solicit or hire one another’s workers,” including top brass at both firms. The pact, dating back to at least 2005, has eliminated competition between companies whose similar work cultures resulted frequent cross-hiring, according to Friday’s complaint in federal court in San Jose, California.
The complaint comes more a year after Apple Inc. and Google Inc. and other Silicon Valley technology companies reached a $415 million settlement over similar claims on behalf of 64,000 employees. Joe Saveri, who represented workers in the Apple- Google case, is the lead plaintiff’s attorney in the LG-Samsung case, which involves tens of thousands of U.S. workers, according to the complaint.
“The impact of this bilateral agreement is exacerbated because of the similarity between LG and Samsung’s businesses, and the scope of the business lines in which LG and Samsung compete in the United States,” according to the complaint by A. Frost, who seeks class-action status on behalf of other employees. “Absent the agreements, LG’s workers would be the most desirable targets of recruiting efforts by Samsung, and vice versa.”
Samsung and LG media representatives didn’t immediately respond to requests for comment on the complaint. Saveri didn’t immediately respond to calls seeking comment.
The case is Frost v. LG Corp., 16-cv-05206, U.S. District Court, Northern District of California (San Jose).
--With assistance from Jing Cao.
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