Judge Rejects $324 Million Settlement In Apple, Google Anti-Poaching Lawsuit

poaching

Image via Bloomberg

An anti-trust lawsuit was filed in 2011 by tech workers of Apple, Google, Intel and Adobe accusing the four Silicon Valley giants of conspiring to avoid hiring each others workers. Earlier this year the settlement for the lawsuit was agreed at $324 Million, which now has been rejected by U.S. District Judge Lucy Koh.

According to CNBC report, Judge Lucy Koh ruled that the settlement “falls below the range of reasonableness,” and should be around $380 Million.

According to the court documents:

The Court finds the total settlement amount falls below the range of reasonableness. The Court is concerned that Class members recover less on a proportional basis from the instant settlement with the Remaining Defendants than from the Settled Defendants a year ago, despite the fact that the case has progressed consistently in the Class’s favor since then. Counsel’s sole explanation for this reduced figure is that there are weaknesses in Plaintiff’s case such that the Class faces a substantial risk of non-recovery. However, that risk existed and was even greater when Plaintiffs settled with the Settled Defendants a year ago, when class certification had been denied.

Using the Settled Defendants’ settlements as a yardstick, the appropriate benchmark settlement for the Remaining Defendants would be at least $380 million, more than $50 million greater than what the instant settlement provides.

The lawsuit was filed by employees against the tech giants, claiming that their employers have agreed to avoid hiring engineers from one another. This was done to control the salaries of deserving workers by not giving them an option to move.

Initially the suit claimed that more than 100,000 employees were affected by the anti-poaching agreement; the plaintiffs later scaled that number to about 64,000.

In her decision, Judge Koh noted that the accusations were largely centred on former Apple CEO Steve Jobs. This was because each of the involved company was somewhat under his control or that had at least one director who was on Apple’s board.

The lawsuit contains several email conversations that Jobs had with other companies’ executives demanding that they do not poach Apple’s workers. In one email, Jobs wrote to Google CEO Eric Schmidt, “I would be very pleased if your recruiting department would stop doing this,” with respect to Google recruiter contacting an Apple engineer in 2007.

Fortunately, not all companies agreed to Jobs’ demands. Koh’s ruling cited an example of an incident in 2007 when Jobs apparently threatened to sue Palm for patent infringement if it didn’t agree to the non-poaching arrangement. In response, Palm’s former CEO Edward Colligan said that the demand was “not only wrong, it is likely illegal.”

(via MacRumors, Mercury News)

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