In a ruling on Friday, U.S. District Judge Lucy Koh in San Jose,
California, said the class action settlement was too low, given the
strength of the case against the companies. Intel and Adobe were
also part of the proposed deal.
There is "substantial and compelling evidence" that late Apple Inc
co-founder Steve Jobs "was a, if not the, central figure in the
alleged conspiracy," Koh wrote. The judge provided details in
evidence of anecdotes involving Jobs and other Valley executives to
show why she thought the workers deserved more.
Representatives for Apple and Google Inc declined to comment. Intel
spokesman Chuck Mulloy said the company is disappointed Koh rejected
an agreement "that was negotiated at arm's length over many months,"
but appreciates that Koh provided additional information on her
Lawyers for the workers, along with an Adobe representative, were
not immediately available to comment.
In their 2011 lawsuit, the tech employees said the conspiracy had
limited their job mobility and, as a result, kept a lid on salaries.
The case has been closely watched because of the possibility of big
damages being awarded and for the opportunity to peek into the world
of some of America's elite tech firms.
The case was based largely on emails in which Apple's Jobs, former
Google Chief Executive Officer Eric Schmidt and some of their rivals
hatched plans to avoid poaching each other's prized engineers.
Koh referred to one email exchange which occurred after a Google
recruiter solicited an Apple employee. Schmidt told Jobs that the
recruiter would be fired. Jobs then forwarded Schmidt's note to a
top Apple human resources executive with a smiley face.
Koh also disclosed a 2006 exchange over Google's plans to open an
engineering center in Paris. Google sought to hire three former
Apple engineers for the project, but Jobs objected. Jobs wrote that
his company would "strongly prefer that you not hire these guys."
Google then told Jobs it had scrapped plans for the Paris center,
"based on your strong preference."
The four companies agreed to settle with the workers in April
shortly before trial. The plaintiffs had planned to ask for about $3
billion in damages at trial, which could have tripled to $9 billion
under antitrust law.
[to top of second column]
Plaintiff attorneys argued Koh should approve the deal because the
workers faced serious risks on appeal had the case gone forward.
Some tech workers filed objections to the settlement, however,
saying both sides should go back to the negotiating table in the
hopes of obtaining a larger amount.
Daniel Girard, a lawyer for one of the objectors, said he is "very
pleased that the court agreed with his position." It is unclear
whether objectors would be included in any future settlement
In her ruling, Koh repeatedly referred to a related settlement last
year involving Disney and Intuit. Apple and Google workers got
proportionally less in the latest deal compared to the one involving
Disney, Koh wrote, even though plaintiff lawyers have "much more
leverage" now than they did a year ago.
To match the earlier settlement, the latest deal "would need to
total at least $380 million," Koh wrote.
The judge also said the plaintiffs had strong evidence to prove how
the no-poaching deals impacted wages. In response to hiring pressure
from Facebook, Google co-founder Sergey Brin announced a policy in
2007 of making counteroffers "within one hour" to any Google
employee approached by the social networking company.
Google then tried to entice Facebook into a no-poaching deal, Koh
wrote, but Facebook refused. The Facebook threat eventually led
Google to alter its salary structure and increase all salaries by 10
percent, Koh wrote.
A further hearing in the case is scheduled for September 10.
The case is In Re: High-Tech Employee Antitrust Litigation, U.S.
District Court, Northern District of California 11-cv-2509.
(Additional reporting by Noel Randewich; Editing by Paul Simao and
[© 2014 Thomson Reuters. All rights
2014 Reuters. All rights reserved. This material may not be
published, broadcast, rewritten or redistributed.