Samsung, LG Hit With Anti-Poaching Class Action Lawsuit

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Samsung and LG allegedly engaged in an unlawful conspiracy to fix and suppress compensation for their employees, a former LG sales manager claims in a proposed anti-poaching class action lawsuit.

The lawsuit, filed in Northern California federal court by plaintiff A. Frost, accuses the two companies, which employ thousands of workers in Silicon Valley, of antitrust violations by agreeing to an anti-poaching deal involving each other’s U.S. employees.

Similar to a case against Apple Inc., Google and other tech companies which settled last year for $415 million, the Samsung LG lawsuit suggests top executives at both Samsung and LG were aware of the alleged anti-poaching agreement, according to the 22-page complaint.

“LG and Samsung have a long-standing agreement — reached at the highest levels of the company’s corporate hierarchy — not to solicit or hire one another’s workers,” the lawsuit reads. “This policy extends to all LG and Samsung affiliates, and to all of the companies’ United States workers.”

According to Frost, a recruiter reached out to him via LinkedIn in 2013, asking him to consider filling a position at Samsung. That recruiter then followed up with another message the same day, Frost says.

“I made a mistake! I’m not supposed to poach LG for Samsung!!! Sorry! The two companies have an agreement that they won’t steal each other’s employees,” the message reportedly said.

The lawsuit also goes on to allege that it is “implausible” that LG and Samsung entered an anti-poaching agreement in the United States without the approval of each of its parent companies in South Korea.

Joseph Saveri, the lawyer representing Frost called the anti-poaching agreements “inherently anti-competitive.”

Saveri stated, “There is nothing more fundamental than the ability to get fairly paid for one’s worth and talents. Private antitrust enforcement is important here. The agreements are hard to root out, so it is important from the perspective of the enforcement of the antitrust laws that these agreements are identified and challenged under the law whenever we can do so.”

Frost is seeking to certify a Class of U.S. workers who were employed at any time by LG or Samsung from Jan. 1, 2005 through the present. A specific amount of damages was not stated in the proposed class action lawsuit.

A similar case was filed against Apple, Google, and a number of other large tech companies last year that was eventually settled for $415 million.

Several technology giants including Apple, Adobe Systems Incorporated, Intel Corporation, Google and others in Silicon Valley were accused of a similar anti-poaching behavior in a lawsuit filed by 64,000 employees including software and hardware engineers, programmers, web developers, and others.

The Silicon Valley workers claimed the tech giants engaged in a conspiracy to eliminate competition to drive down wages.

Frost is represented by Joseph R. Saveri, Matthew S. Weiler and Kyla J. Gibboney of Joseph Saveri Law Firm Inc. and Stuart G. Gross of Gross & Klein LLP.

The Samsung and LG Anti-Poaching Class Action Lawsuit is Frost v. LG Corp., et al., Case No. 5:16-cv-05206, in the U.S. District Court for the Northern District of California.

UPDATE: On Jan. 23, 2017, Samsung and LG asked a federal judge to toss claims brought by three former LG employees, arguing that the anti-poaching claims are based on stereotypes regarding Korean companies and are devoid of factual allegations about the alleged antitrust conspiracy.