U.S. District Judge Lucy H. Koh has given final approval to a $415 million class action settlement with Apple Inc., Google Inc. and others, resolving claims they illegally agreed not to poach each other’s engineers. The California federal judge ruled that the settlement, which added an additional $90 million onto a $325 million settlement she rejected in August 2014, fairly reflected the strength of the software developers’ claims that Google, Apple, Intel Corp. and Adobe Systems Inc. suppressed wages and violated antitrust laws by agreeing not to hire each other’s engineering talent. The Defendants were accused of conspiracy to hold down salaries.
Judge Koh rejected several objections to the agreement, saying a settlement that awarded the Plaintiffs more than 14 percent of their estimated single damages was reasonable, particularly given that the Defendants disputed the amount. Judge Koh wrote:
In objecting to the size of the settlement, none of these class members adequately take into account the risks and delays involved in proceeding to trial. They ignore that the settlement provides the class with a timely, certain, and meaningful cash recovery, while a trial – and any subsequent appeal – is uncertain, would entail significant additional costs, and in any event would substantially delay any recovery achieved.
The software engineers sued the 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 allegations came to light after a U.S. Department of Justice investigation into the hiring practices of several Silicon Valley technology companies. They also agreed to cap pay packages for prospective hires to prevent bidding wars and to abstain from recruiting one another’s personnel, the Plaintiffs contended. The agreements depressed the workers’ pay 10 percent to 15 percent below what it would have been with natural market conditions, the Plaintiffs claimed.
The antitrust class action lawsuit was filed in 2011. It has been closely watched because of the possibility that big damages might be awarded and for the opportunity to peek into the world of some elite U.S. tech firms. The case was based largely on emails in which Apple co-founder Steve Jobs, former Google Chief Executive Officer Eric Schmidt and some of their rivals detailed plans to avoid poaching each other’s prized engineers.
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