Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Cal.: Claims that Oracle conspired to fix employee compensation time-barred, (Apr 23, 2015)

By Greg Hammond, J.D.

One of the largest software producers in the world successfully evaded claims that it conspired with Google to enter into a “Restricted Hiring Agreement” with the intent and effect of fixing the compensation of employees of participating companies at artificially low levels. The federal district court in San Jose partially granted the software producer’s motion for judgment on the pleadings, finding that the former employee’s claims under the Sherman Act, California Cartwright Act, California Unfair Competition Law (UCL), and California covenant not to compete law were time-barred (Garrison v. Oracle Corp., April 22, 2015, Koh, L.).

Background. Oracle Corporation, the second largest software producer in the world by revenue, specializes in the development and marketing of computer hardware systems and enterprise software products. Former Oracle employee Greg Garrison filed suit against Oracle, alleging violations of the Sherman and Cartwright Acts, the UCL, and California covenant not to compete law. Specifically, Garrison claims that Oracle conspired with Google Inc. and other technology companies to enter into a Restricted Hiring Agreement, in which the companies agreed not to pursue each other’s manager level and above employees for product, sales, or general and administrative roles. Garrison additionally alleged that Oracle entered into the agreement with the intent and effect of fixing the compensation of employees of participating companies at artificially low levels. Oracle moved for judgment on the pleadings.

Article III standing. The court first determined that Garrison had Article III standing to bring his claims. Specifically, the court found that Garrison sufficiently pleaded that he worked for and was paid by Oracle from December 2008 to June 2009 and that Oracle’s anticompetitive conduct artificially depressed his compensation for that period. He therefore alleged a cognizable injury for purposes of Article III. The motion for judgment on the pleadings was denied with regard to Oracle’s argument that Garrison failed to allege an Article III injury-in-fact.

Claims time-barred. Although Garrison had Article III standing, his claims were time-barred under the applicable four-year statutes of limitations, which indisputably began to run in May 2007. Garrison’s assertion that Oracle’s conspiracy “was a continuing violation through which [Oracle] repeatedly invaded Plaintiff and Plaintiff Class’ interests by adhering to, enforcing, and reaffirming the anticompetitive agreements” was deemed insufficient to show a continuing violation. Moreover, the factual allegations in Garrison’s complaint demonstrated no alleged wrongful communications or specific conduct during the limitations period.

Finally, Garrison’s argument that the statute of limitations should be tolled under the fraudulent concealment doctrine was rejected. Specifically, the court found that Oracle had no obligation to affirmatively disclose its alleged illicit conduct and that Garrison failed to allege when, where, or to whom Oracle allegedly provided false and misleading explanations, or the content of the allegedly misleading explanations to support his fraudulent concealment argument. Because no affirmative act of concealment was adequately pleaded, all four claims were deemed time-barred under the four-year statutes of limitations. Oracle’s motion for judgment on the pleadings was therefore granted on statute of limitations grounds. Nevertheless, Garrison was granted leave to amend his complaint.

The case number is 14-CV-04592-LHK.

Attorneys: Bryce Aaron Dodds (Hogue and Belong) for Greg Garrison. Daniel Murray Wall (Latham & Watkins LLP) for Oracle Corp.

Companies: Oracle Corp.

Cases: Antitrust CaliforniaNews