Judge Rejects $324M Settlement Proposal in Apple, Google Class-Action Anti-Poaching Lawsuit

Friday August 8, 2014 12:44 pm PDT by Juli Clover

Judge Lucy Koh today rejected the settlement deal that Apple, Google, Intel, and Adobe had reached with tech workers over a lawsuit involving anti-poaching agreements, reports CNBC.

According to court documents, Koh believes the total settlement "falls below the range of reasonableness," compared to the $20 million settlement that Pixar, Lucasfilm, and Intuit reached with tech employees in 2013. Proportionally, based on that settlement, Apple and the other tech companies should have to pay out at least $380 million.

apple_google_logo

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.

Tech workers initially levied the class action anti-poaching lawsuit against the companies in 2011, accusing them of creating no-hire agreements and conspiring not to poach employees from one another in an effort to keep salaries lower.

No-solicitation agreements revealed during the lawsuit dated back to 2005, involving Apple, Google, Intel, Adobe, Intuit, Lucasfilm, and Pixar, among others. The agreements prevented company recruiters from contacting employees placed on specific no-contact lists.

The United States Department of Justice stepped in back in 2010, ordering the companies to stop entering anti-poaching agreements, but the class-action civil lawsuit brought against the companies by 64,000 employees will remain open until a suitable settlement can be reached. The suit originally asked for $3 billion in damages, a significantly higher number than the 324 million agreed upon in April.

Top Rated Comments

NT1440

159 months ago

Good, silicon valley as a whole stole billions in wages for employees through this scheme. The payout should be much higher.

That said, this is in a country where Bank of America is about to pay $17 Billion for their illegal acts that helped tear down the economy, but resulted in hundreds of billions in profit at the time.

We live in a pay to play corporatocracy, and good on this judge for holding out for more.

Score: 27 Votes (Like | Disagree)

theheadguy

159 months ago

Exctly. If both sides agree, the judge should have no say in the matter. Unless she just wants more media attention, which sadly seems to be the case here.

My question is: Did the tech worker's side accept the settlement? Who gives a rat's derriere what the Judge thinks if the tech worker's side is okay with the settlement.

Then this is a wonderful educational opportunity for you. In certain types of legal cases, the judge gets to ensure that the settlement is fair for the workers. Attorneys (on both sides, sometimes) do not always have the workers' best interest in mind.

Score: 13 Votes (Like | Disagree)

Small White Car

159 months ago

My question is: Did the tech worker's side accept the settlement?

Who gives a rat's derriere what the Judge thinks if the tech worker's side is okay with the settlement.

Because the companies broke the law. This is not just a civil lawsuit.

It appears that the government is stepping back and letting the lawsuit act as the punishment, but should the workers just give up and say "never mind" then the government would have to step in and do something.

So based on that, yes, they do have an interest in how the 'punishment' ends up.

Score: 10 Votes (Like | Disagree)

Albanbrooke

159 months ago

The Judge's decision is actually really good.

Exctly. If both sides agree, the judge should have no say in the matter. Unless she just wants more media attention, which sadly seems to be the case here.

The judge has to have a say in the matter because this is a class action lawsuit.

Class action lawsuits are different because the plaintiffs (people who got screwed) aren't really involved in the suit themselves. There are a few "named plaintiffs" who might be, but it is likely only five people out of the tens of thousands who were harmed by this practice.

Class actions are often settled so that the attorneys make a TON of money; like tens of millions of dollars in fees. The proposed settlements actually include an agreement of how much money goes to the attorneys who brought the lawsuit against Apple and Google.

It is possible that:

1) The judge didn't feel that the class of harmed individuals (everybody who was underpaid as a result of the anti-poaching agreement) was being served by the terms of the agreement, or
2) That the attorneys' fees were way too high.

There are actual cases where the class gets pennies on the dollar while some of the attorneys walked away with $5k/hr for their work. Judges MUST be active in these types of cases.

Score: 8 Votes (Like | Disagree)

nagromme

159 months ago

Agreed; that does fall below the range of reasonableness. It even falls below the level of noticeableness.

Tim Cook doesn't seem likely to even want to continue the practice, but Apple itself isn't all that matters. Other big companies are looking at this precedent. Telling them "go ahead, you might get fined pocket change" would not be helping the problem.

Score: 7 Votes (Like | Disagree)