A class-action lawsuit has been filed against the estate of Steve Jobs by one of Apple's shareholders for allegedly misleading investors and damaging the company's value through hiring agreements with other companies.
What's wrong with a little hiring agreement? It's bad news if it violates the U.S. Securities and Exchange Act, which Apple apparently did when it made a deal with other companies to not recruit employees actively away from one another. In addition, the complaint alleges that the Apple board of directors participated in a conspiracy that aimed to manipulate wages in the tech industry, exposing the company to billions in restitution for the fixed wages.
The lawsuit was filed by R. Andre Klein, done on behalf of all other Apple shareholders. Klein was critical of Jobs, saying it was the Apple founder that got the company in trouble. "Jobs's conduct is a reminder that even widely respected businessmen can knowingly commit unlawful acts in the zealous pursuit of profits," Klein said.
"In this case, Jobs and the other individual defendants knowingly caused Apple to enter into agreements that violated California law and US antitrust laws," he adds.
Klein is seeking an unspecified amount from Apple to compensate for damages to shareholders arising from the case and for "breach of fiduciary duties." Apple CEO Tim Cook is also named as a defendant in the case.
Apple was sued for the "no poaching" deal by 64,000 employees in the tech industry who claimed they had lower wages because of the illegal agreement between Silicon Valley companies. The company had agreed to settle for $325 million but U.S. District Judge Lucy Koh ruled against the settlement, stating it was not reasonable given that "ample evidence of an overarching conspiracy" among the involved companies is present. Other companies implicated in the mess include Adobe and Intel.
More than 20,000 current and former employees also filed a separate case against Apple for violating California's Labor Code and Wage Orders. In 2013, Apple also had to go against David Einhorn, a hedge fund manager who took on the company to get it to use its cash stockpile to reward investors. At the time, Apple had some $137 billion in cash and Einhorn sued the company to make it offer a more satisfying capital allocation strategy for investors. Einhorn eventually dropped the case but not before pitching the beauty of preferred stock to shareholders.