Apple Inc. (AAPL)’s Senior Directors and Officers Now Being Sued By Shareholders Over the Hiring Case


According to an article on 9to5mac by Mike Beasley, Apple Inc. (NASDAQ:AAPL)’s senior directors are facing a new lawsuit over its illegal anti-poaching agreement they had in place with at least 25 other companies, which did not include only the most important names in the tech sector, but also some companies from other sectors as well, such as Nike Inc (NYSE:NKE).

Illegal agreements, Apple Inc. (NASDAQ:AAPL) was allegedly having with more than two dozen of companies, meant that Apple Inc. (NASDAQ:AAPL)  and other companies were avoiding hiring each other’s engineers, suppressing in that way employees’ wages, while avoiding the risk of losing their own workforce to a competitor due to a better deal. This has caused substantially diminished competition to the detriment of the affected employees who were likely deprived of competitively important information and access to better job opportunities.

Apple Campus AAPL

According to Beasley, the new lawsuit comes barely a week after a class action settlement between employees of Apple Inc. (NASDAQ:AAPL), Google Inc (NASDAQ:GOOG), Intel Corporation (NASDAQ:INTC) and Adobe Systems Incorporate (NASDAQ:ADBE) and their respective companies has been rejected by the judge, as not high enough at $324 million. The latest lawsuit has come from shareholder R. Andre Klein, who has filed a derivative complaint on behalf of all shareholders.

Klein is suing Apple Inc. (NASDAQ:AAPL)’s senior directors and officers, including its departed founder and former CEO Steve Jobs, for “breach of fiduciary duty, gross mismanagement, waste of corporate assets, and breach of the duty of honest services”. Specifically, they are accused of causing the company to, among other things, expend substantial amounts of time and money to defend itself from various lawsuits and to satisfy the settlement, harming the company’s reputation, caused the loss of innovation, and opportunity costs from years of lost opportunities to hire more qualified employees that were hired at other companies.

Email evidences show that Steve Jobs made threats to companies that did not want to comply with his requests of not poaching Apple Inc. (NASDAQ:AAPL)’s employees. When Palm’s CEO at that time, Ed Colligan, refused to give in to the Steve Jobs’ proposal that neither company hires the others’ employees, on both moral and legal reasons, Steve Jobs threatened to sue Palm over a patent. After Colligan said that he would counter it and that it is not in anyone’s interest as it would “cause both companies to lose a lot of money on lawyers”, Jobs reminded him of the “financial asymmetry” and of “patent portfolio” of his company. Later emails reveal that Colligan has given in to Steve Jobs’ threats.

Beasley from 9to5mac adds that the shareholder’s case is being based on the same evidence that has been presented during the class action suit brought by current and former employees of the companies involved in the agreements. Beasley also provided the filing itself, which can be read below. The filling is filled with tens of strong evidences, mostly in the form of emails.

Apple Shareholder Suit

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