• 13
  • May
    2011

In our last post, we wrote about several California-based companies that are facing a class-action lawsuit for attempting to fix and suppress the wages of their employees. The companies - Apple, Google, Intel, Adobe, Pixar, Lucasfilm and Intuit - are all in some way related to each other. Each of the companies is either "controlled by Apple's CEO, or a company that shared a member of its board of directors with Apple."

One of the main complaints in the lawsuit details the use of cold calling and information sharing. The companies are facing the lawsuit, in part, because their employment policies explicitly prohibit cold calling. Although the policies can be put in place to prevent companies from poaching each other's most valuable employees, it negatively impacts the employees.

When employees do not receive cold calls from other companies, they often do not have the bargaining information they need when it is time to discuss pay-raises in their current positions.

In addition, when employees receive cold calls from other employers, they are likely to share that information with other employees. As a result, even employees who are not called directly can still use that information to negotiate their salaries.

In many situations, cold calling results in employees leaving one company to go to a more desirable position. To prevent that, many employers will "preemptively increase the compensation of its employees in order to reduce the risk that its rivals will be able to poach relatively undercompensated employees."

At the heart of the lawsuit is the information that is available to individuals through cold calling. Cold calling and transparency often means employees receive higher and more appropriate compensation packages. When employers prevent their employees from receiving the information they need, they also prevent them from receiving the pay they deserve.

Source: Forbes, "Apple Allegedly at Center of Employee Compensation Conspiracy Involving Google, Intel, Adobe, Pixar, and Lucasfilm," Ben Kerschberg, 4 May 2011