LG-Samsung Hiring Practices: Lawsuit Accuses Companies Of Agreeing Not To Recruit Each Other’s Employees

A civil lawsuit filed at a Northern California federal court has accused LG Electronics Inc. and Samsung Electronics Co. of having an agreement to not hire each other’s U.S. employees, according to reports Monday. The case is similar to the one involving Apple, Google and other major Silicon Valley companies that settled last September for $415 million.

The lawsuit, filed Friday, seeks class-action status and has been filed by a former LG sales manager, A. Frost, who said in the suit that the agreement between the two companies was of the “highest levels.” It did not specify the damages Frost sought for the alleged deal.

According to the lawsuit, a recruiter seeking a position to fill in Samsung contacted Frost through LinkedIn in 2013. But the recruiter told 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.”

Frost said in the suit that it would be unlikely that such an agreement could have been reached in the U.S. without the approval of the company’s corporate parent in South Korea.

However, an LG spokesman reportedly said that “no such agreement has ever existed” and the allegation lacked merit. Samsung did not comment on the issue.

An attorney for Frost, Joseph Saveri, reportedly said that such deals were anticompetitive. Saveri had also previously filed cases against tech giants Apple and Google.

In September 2015, although Apple, Intel, Adobe and Google denied wrongdoing, they agreed to pay $415 million to over 60,000 current and former employees to settle a class-action lawsuit related to similar allegations. The plaintiffs had argued that such agreements restricted their growth in the industry and suppressed their attempts to earn higher salaries.