updated 10:04 am EDT, Fri August 15, 2014
Directors, executives accused of bringing company into legal trouble
A new lawsuit, filed on behalf of plaintiff R. Andre Klein, is seeking damage compensation for Apple shareholders as a result of alleged misconduct by the company's directors and executives. Lawyers for Klein accuse former CEO Steve Jobs, current CEO Tim Cook and others of "breach of fiduciary duty, gross mismanagement, corporate waste, and breach of the duty of honest services." Specifically, by engaging in anti-poaching practices, Apple leaders are said to have caused the company to break antitrust laws, issue misleading proxy statements, and suppress workers' wages.
It's also said to have wasted significant amounts of money due to "years of lost opportunities to hire more qualified employees that were employed at other companies; costs incurred from defending and paying a settlement in the class action for violation of antitrust laws; costs incurred from defending and settling allegations by the Department of Justice; and loss of reputation."
The complaint is founded largely on a separate and as-yet-unsettled class action lawsuit against Apple, Adobe, Google, and Intel over anti-poaching agreements. The companies are believed to be at the center of a conspiracy in which they and other technology firms agreed not to hire from each other. This may have allowed the involved parties to avoid competing in salaries and benefits to lure and retain talent.
Klein's attorneys point to a particularly damning series of discoveries in that case which put Jobs at the center of the conspiracy. A series of emails shows that in 2005, Jobs made "irate" phone calls to Google co-founder Sergey Brin, complaining about Google trying to recruit members of Apple's Safari team. By February 26th the two companies had forged a pact not to hire from each other; from there anti-poaching agreements extended to many other businesses, including Comcast, Microsoft, Oracle, and IBM. A surfaced affidavit suggests that Jobs may have even threatened Palm with a patent suit if it hired an Apple worker; former Palm CEO Edward Colligan is said to have described Jobs' anti-poaching rules as "likely illegal."
Aside from Jobs and Cook, other defendants named in the suit include former board chairman William Campbell, former CFO Fred Anderson, and board members Mickey Drexler, Art Levinson, Robert Iger, and Andrea Jung. Another 30 anonymous defendants are cited, but their identities will only be investigated if the case moves into discovery.