Samsung and LG Sued in the US for Unfair Employee Recruiting Policies

Samsung Electronics and LG Electronics were apparently accused of having a tacit agreement not to poach each other's U.S. employees, according to a U.S. civil lawsuit filed last week, in what has become a familiar allegation in Silicon Valley according to Reuters.

Reuters said that the proposed class action, filed in a Northern California federal court by a former LG sales manager, lambasts Samsung and LG of antitrust violations which apparently drove down employee wages. The case is similar to one against Apple, Google and other tech companies which was settled last year for $415 million.

An LG spokesman released a statement saying that "no such agreement has ever existed between LG and SAMSUNG. The accusation was without merit." Samsung declined to comment.

The plaintiff, A. Frost, says in the lawsuit that a recruiter contacted Frost via LinkedIn in 2013, seeking to fill a position with Samsung. According to the lawsuit, the recruiter then informed Frost the same day: "I made a mistake! I'm not supposed to poach LG for Samsung!!! Sorry! The two companies have an agreement that they won't steal each other's employees."

Reuters explained that it is "implausible" that such a deal in the United States could have been reached without the consent of each company's corporate parent in South Korea says the lawsuit.

Joseph Saveri, an attorney who legally represents Frost and who had also filed the previous cases against Apple and Google, said that the no-poaching agreements are inherently anticompetitive.

"There is nothing more fundamental than the ability to get fairly paid for one's worth and talents," he said.

The case in U.S. District Court, Northern District of California is A. Frost vs. LG Corporation, LG Electronics Inc, Samsung Electronics Co Ltd et al., 16-5206.