Employees of some of Silicon Valley's biggest companies have called on the appellate court to reject a $324.6 million settlement in a long-standing class-action lawsuit accusing the firms of entering anti-poaching agreements.
Around 64,000 software and hardware engineers, programmers, digital artists and other technical workers for Apple, Google, Intel and Adobe are suing the companies for allegedly conspiring from 2005 to 2009 to agree against hiring one another's employers, effectively putting a lid on their salaries and reducing their mobility.
The plaintiffs' allegations are based on a series of email exchanges between the companies' heads, notably between Apple founder Steve Jobs and then Google CEO Eric Schmidt, where Schmidt apologized to Jobs and said that Google was terminating "within the hour" a Google recruiter who violated Apple's "do not call policy" and contacted an Apple employee. Plaintiffs say Jobs responded with a smiling emoticon.
Last month, Judge Lucy Koh of the U.S. District Court of San Jose, California rejected the companies' settlement offer of $324.6 million, which would have amounted to a payment of $2,000 to $8,000 per worker. At that time, Koh said that she referred to another case last year involving a similar agreement among Disney's Pixar, Intuit and Lucasfilm.
"The remaining defendants should, at a minimum, pay their fair share as compared to the settled defendants, who resolved their case with plaintiffs at a state of the litigation where defendants had much more leverage over plaintiffs," Koh said.
In their filing, plaintiffs said the $324.6 million, which is a mere fraction of the $3 billion in damages plaintiffs are seeking and could be tripled if the courts find the companies violated antitrust laws, "ceased to exist" the moment Koh turned it down on the grounds that the amount was settled by both sides.
"Plaintiffs of course believe that the proposed settlement they submitted to the district court warranted approval," the plaintiffs say. However, they also say that they would "defer to (Koh's) sound judgement about how best to oversee this litigation." According to Koh, the settlement would at least need to amount up to $380 million to match the settlement made by Disney, Intuit and Lucasfilm and their workers.
Lawyers for the four defendants, usually rivals in the business arena, have joined forces and appealed Koh's decision, saying that she "committed clear legal error" in rejecting the proposal.
Orly Lobel, a University of San Diego law professor who specializes in labor and employment, believes the proposed amount is "problematic."
"There is a significance in seeing this case through and having such leading companies internalize the illegality of these actions," she says.
