A settlement worth $324.5 million for a class action lawsuit filed by tech workers against Apple, Google, Intel and Adobe has been rejected by a U.S. court.
The lawsuit accused the four tech companies of conspiring to prevent poaching the works of each other, effectively limiting the job mobility of the workers and putting a cap on their potential salaries.
According to a ruling by U.S. District Judge Lucy Koh, the proposed amount for the settlement "falls below the range of reasonableness."
Koh deemed that the amount was insufficient, considering that a settlement worth $20 million was earlier reached in a similar case against Intuit and Walt Disney's Pixar and Lucasfilm.
With Koh's rejection of the settlement, litigation of the case will continue, with the possibility that it will go to trial.
The four involved companies reached an agreement for a settlement the tech workers in April for the aforementioned amount. However, the workers were seeking about $3 billion worth of damages in trial, which is an amount that can go as high as $9 billion within antitrust regulations.
"While the unpredictable nature of trial would have undoubtedly posed challenges for plaintiffs, the exposure for defendants was even more substantial, both in terms of the potential of more than $9 billion in damages and in terms of other collateral consequences, including the spotlight that would have been placed on the evidence," Koh wrote.
Koh's rejection of the settlement, however, was received with mixed reactions. Attorneys representing the tech workers said that the judge should have approved the deal as the employees would be facing serious risks if the case goes to appeals. Some tech workers, however, believe that the amount of the settlement is too low, and that the two parties should once again negotiate for a larger amount.
The case is largely based on email conversations between the late Apple co-founder Steve Jobs, former Google CEO Eric Schmidt and other top executives from fellow Silicon Valley companies Intel and Adobe.
The email exchanges revealed that executives forming plans and conspiring with one another so that workers are not poached by other companies, as the engineers employed by companies are very valuable to them.
In one recovered email exchange, Schmidt told Jobs that he will be firing a Google recruiter that solicited an employee of Apple. Afterwards, Jobs forwarded Schmidt's message to a top executive for human resources in Apple, with a smiley face.
