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Adobe Faces Lawsuit from Thousands of its Employees

  • Published on June 21, 2014
Adobe Faces Lawsuit from Thousands of its Employees

Adobe Systems, the maker of design tools such as Photoshop, InDesign, and Illustrator, along with Apple, Google, and Intel recently agreed to a $324.5 million settlement to resolve charges that they had entered into secret agreements that harmed their employees by keeping them from being able to get jobs at other companies. The charges stemmed from a pact between Adobe and the other companies where they would not hire each other’s employees, even if they had applied for jobs on their own. But a U.S. District Court judge has indicated that the settlement may not be acceptable.

More than 64,000 technology workers in the Silicon Valley region were impacted by the pact in which the companies agreed to not hire workers from each others companies. The companies went to great lengths to try and keep the agreement secret, but word eventually leaked and the employees banded together and brought a lawsuit against Adobe and several other companies. This week a U.S. District Court judge in San Jose, California questioned whether the proposed settlement was large enough. "I have concerns over whether it's sufficient," Judge Lucy Koh said in reviewing the settlement that Adobe and the other companies will need to pay to their employees. Judge Koh will need to approve the settlement before the charges brought by current and former employees of Adobe are dismissed. If the settlement is not dismissed, it may go to trial. The judge has previously questioned the logic behind settling the case, making it possible that either she or a jury may hear the case, and damages against the companies could be much greater than the proposed settlement amount.

The pact to not allow employees to move between companies was created at the highest levels of their management. Former Apple CEO Steve Jobs was involved in the secret agreement. Jobs told Google founder Sergey Brin “If you hire a single one of these people, that means war." As news of the scandal broke, Adobe CEO Shantanu Narayen appeared safe in his job, but the company replaced the head of their legal team, Karen Cottle, and several members of the legal team have left the company, although they have not directly indicated their departure was related to involvement in the illegal pact.

As an organization that provides Adobe training courses and uses their design tools to write training curriculum and books, we closely follow news relating to Adobe Systems. Reports that the company seeks to keep employees from being able to move to other companies and jobs may impact its ability to attract and retain high quality employees.

About the author

Christopher Smith is president of American Graphics Institute in Boston, Massachusetts. He is the publisher and editor of the Digital Classroom book series, which have sold more than one million copies. At American Graphics Institute, he provides strategic technology consulting to marketing professionals, publishers and to large technology companies including Google, Apple, Microsoft, and HP. An expert on web analytics and digital marketing, he delivers Google Analytics classes along with workshops on digital marketing topics. He is also the author of more than 10 books on electronic publishing tools and technologies, including the Adobe Creative Cloud for Dummies. Christopher did his undergraduate studies the at the University of Minnesota, and then worked for Quark, Inc. prior to joining American Graphics Institute where he has worked for 20 years.