LG, Samsung Class Action Lawsuit Alleges Anti-Poaching Conspiracy

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Another proposed class action lawsuit filed against Samsung and LG alleges the companies agreed not to hire each other’s workers in order to fix employee wages at an artificially low level.

The anti-poaching lawsuit claims “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.”

Specifically, the plaintiff, a former engineer for LG, alleges the anti-poaching agreement is anticompetitive because it harms LG and Samsung employees by “imposing restrictions on employee mobility, thereby depriving them of better job opportunities at the other company.”

The plaintiff further accuses Samsung and LG of antitrust violations and believes the two South Korean companies have worked together since 2005 to suppress workers’ compensation by eliminating competition.

“Defendants entered into, implemented, and policed the agreement with the knowledge of the overall conspiracy, and did so with the intent and effect of suppressing mobility and information sharing between and among employees of the companies, and thereby fixing the compensation of the employees of participating companies at artificially low levels,” alleges the complaint.

The anti-poaching lawsuit seeks class action status on behalf of all LG and Samsung employees in California. It alleges that the similarity between LG and Samsung increases the impact of their collusion.

“In the United States, LG and Samsung more closely resemble one another than any other employer. Therefore, the agreement cuts defendants’ employees off not only from the closest competitor for salary and benefits, but also from the most obvious step for career advancement outside of the employee’s current position,” according to the lawsuit.

The class action lawsuit follows another Samsung LG anti-poaching lawsuit also filed in Northern California federal court.

According to the LG employee in this case, a recruiter cold-called him in October 2013, seeking to fill a position at Samsung. The recruiter reportedly stated “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 lawsuit alleges.

Allegations of anti-poaching deals involving other Silicon Valley-based technology companies have been at the forefront of several legal settlements.

In 2010, a number of large tech companies including Apple, Google, Intel, and Adobe Systems, agreed to settle civil charges brought by the U.S. Department of Justice alleging they had violated antitrust law by agreeing not to hire each other’s employees. The companies did not admit wrongdoing or pay fines.

Just last year, Apple, Intel, Adobe and Google agreed to pay 64,000 current and former workers $415 million to settle a class action lawsuit over similar anti-poaching allegations.

The plaintiff is represented by Jason S. Hartley, Jason M. Lindner, and Julie A. Kearns of Stueve Siegel Hanson LLP.

The Samsung and LG Anti-Poaching Class Action Lawsuit is Case No. 5:16-cv-05586, in the U.S. District Court for the Northern District of California, San Jose Division.