The district judge in San Jose, Calif., rules that a negotiated $324.5 million settlement is too low.
Top management of four of the Silicon Valley’s largest tech companies – Google, Apple, Adobe and Intel – allegedly colluded among themselves to suppress employees’ pay and prevent employee poaching. The employees filed a civil lawsuit in San Jose, Calif. federal court and the four companies offered a $324.5 million settlement to avoid the case going to trial.
Deeming the dollar amount insufficient because the trial could produce a multi-billion dollar ruling, U.S. District Judge Lucy H. Koh rejected the deal this week. The plaintiffs in the case could be awarded as much as $9 billion following a jury trial and Loh deemed the proposed settlement too low.
Loh used a $20 million settlement in similar action against Intuit, Lucasfilm Ltd. and Walt Disney Co.’s Pixar as a reference point, calling for a larger settlement fund, according to Bloomberg.
Mark Lemley, a Stanford Law School professor, told Bloomberg that he thinks “the parties will return with a modestly larger settlement soon.”
The latest ruling is part of a longer saga for Apple and Google, which have been embroiled in litigation since 2011 over hiring practices that ran afoul of federal antitrust laws. Emails between Google executive Eric Schmidt and late Apple executive Steve Jobs revealed the extent of the approach, as Schmidt messaged Jobs that a recruiter who contacted an Apple employee against Google’s “do not call policy” would be fired.
The current lawsuit is private civil action that follows the U.S. Justice Department’s case against the tech companies that was settled in 2010, according to Bloomberg.
Apple, Google, Intel and Adobe workers reached the $324.5 million settlement in May, a sum that is one-tenth of the $3 billion that they planned to seek at trial that was set for later that month, Bloomberg reported.
Federal antitrust law calls for damages won at a trial to be tripled, raising the possibility of a $9 billion verdict.
The plaintiffs included software and hardware engineers, programmers, digital artists and other technical staff who alleged their employers conspired from 2005 to 2009 to suppress their pay, Bloomberg reported.
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