Google, Apple, Intel, and Adobe have agreed to pay former and current employees a total of $415 million to settle a class-action lawsuit accusing the four companies of participating in an "overarching conspiracy" to block employee mobility and bring salaries down.
This is the second settlement agreement proposed by the companies after United States District Judge Lucy Koh rejected the first proposal of $324.5 million in August. If approved, the amount will be divided by some 64,000 employees accusing the companies of conspiring to refrain from hiring one another's prized engineers, thereby reducing job growth and opportunities for the workers while increasing profits for the companies.
In a document filed with the U.S. District Court in San Jose, California, the companies denied allegations of any wrongdoing and said they have agreed to settle to avoid the potentially high costs of litigation.
"We deny the allegations contained in the suit and we deny that we violated any laws or that we have any obligation to the plaintiff," says Chuck Mulloy, spokesperson for Intel, in an email to CNET. "We elected to settle the matter in order to avoid the risk, burdens, and uncertainty of ongoing litigation."
Google, Apple, and Adobe declined to comment.
Koh rejected the original settlement proposal because it was too low. In her decision, the judge wrote that for the employees of the four companies to receive the same amount that was settled by Pixar, Intuit, and Lucasfilms, three other companies that were part of the case prior to settling, the Silicon Valley firms need to offer a minimum of $380 million.
The plaintiffs, filing the case in 2011, had initially asked for $3 billion in damages. Had the case gone to trial and plaintiffs provided "ample evidence" of violation of U.S. antitrust laws, the companies would have paid up to $9 billion in damages.
Central to the plaintiffs' case is a series of email exchanges from the company's top-ranking executives. One such exchange between Apple founder Steve Jobs and then Google CEO Eric Schmidt demonstrating cooperation between the two companies' heads, at least when it comes to refraining from hiring each other's workers.
"I would be very pleased if your recruiting department would stop doing this," Jobs wrote to Schmidt in an email dated March 7, 2007.
The email led to the firing of the Google recruiter who approached the Apple engineer, with Google's head of staffing asking Schmidt to "please extend my apologies as appropriate to Steve Jobs" and noting that it was "an isolated incident."
In 2009, the companies agreed to discontinue their agreement not to go after one's workers following an antitrust investigation by the U.S. Department of Justice. Still, they maintained denial of any wrongdoing.
