LG & Samsung face lawsuit over employee recruiting scandal

LG & Samsung face lawsuit over employee recruiting scandal

A former employee for LG Electronics has filed a suit against Samsung Electronics, claiming that both companies have an agreement that prevents them from recruiting each other’s Silicon Valley employees.

The lawsuit, filed on Friday by a former LG Sales Manager identified as A Frost, said that the agreement between the two companies was of the “highest levels”, which he learned through a recruiter in 2013. 

According to Frost, a recruiter seeking to fill a role at Samsung contacted him via LinkedIn in 2013. However, the recruiter later told Frost on 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.”

The lawsuit seeks class-action status on behalf of all LG and Samsung employees in California – Wall Street Journal reports.

Frost said in the suit that it would be unlikely that the poaching agreement could have been reached in the US without consulting the company’s corporate parent in South Korea.

An attorney for Frost, Joseph Saveri, who also filed previous cases against Apple and Google, allegedly said the agreements were anticompetitive.

In September 2015, Apple, Intel, Adobe and Google faced similar allegations, of conspiring to limit job mobility and driving down salaries.

The four tech giants denied wrongdoing; however, they agreed to pay $415million to over 60,000 current and former employees to settle a class-action lawsuit. 

The ‘no-hire’ policy meant that staff could not move to new roles with competitors and therefore restricted their potential earnings.

An LG spokesman reportedly claimed that “no such agreement has ever existed” and the allegation lacked merit. Samsung did not comment on the issue, International Business Times reports. 

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