U.S. District Judge Lucy H. Koh has given preliminary approval to a $415 million settlement in the antitrust class action accusing Apple Inc., Google Inc. and others of illegally agreeing not to poach each others’ engineers. The revised settlement proposal was called a “substantial” payout. In rejecting an earlier $325 million settlement, Judge Koh ruled in August that the companies should have offered at least $380 million because the class members would have recovered proportionally less from the rejected settlement than from settlements reached last year with Intuit, Lucasfilm and Pixar. Judge Koh’s order granting preliminary approval to the settlement follows a hearing last month in which she indicated she would give it her approval. A final approval hearing is scheduled for July 9, with an opt-out deadline of May 21.
In rejecting the earlier settlement, Judge Koh said there was “ample evidence” of a conspiracy between the companies, including conversations involving Apple founder Steve Jobs and Google Chairman Eric Schmidt. Judge Koh wrote that jobs allegedly told Google that hiring any of his employees would start a “war,” and other companies honored the deals because they feared Jobs. Jobs once allegedly wrote to Schmidt after a Google recruiter contacted an Apple engineer, prompting Schmidt to fire the recruiter in less than an hour.
The software engineers sued Apple, Google and other Silicon Valley companies in May 2011 for damages, claiming that the companies had agreed to provide each other notice whenever one made an offer to another’s employee. The Plaintiffs contended the companies also agreed to cap pay packages for prospective hires to prevent bidding wars, and to abstain from recruiting one another’s personnel. The agreements depressed the workers’ pay 10 to 15 percent below what it would have been with natural market conditions, the Plaintiffs claimed.
The approved settlement ends nearly four years of litigation. The allegations came to light following a U.S. Department of Justice investigation into the hiring practices of several Silicon Valley technology companies.
The new settlement is “substantial, particularly in light of the risk that the jury could find no liability or award no damages,” Judge Koh wrote, adding that the Plaintiffs had already received $20 million from previous Defendants Intuit Inc., Lucasfilm Ltd. LLC and Pixar Animation Studios Inc. The case has spawned several related suits involving anti-poaching allegations against Dreamworks Animation SKG, Pixar, The Walt Disney Co., Sony Pictures Animation Inc., Oracle Corp. and others.
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