Tech-Wage Settlement Vexes Member of Class

(CN) - A $324 million settlement with Apple and other tech giants is "grossly inadequate," a class representative said, likening terms over the alleged poaching ban to having a shoplifter pay $40 for an iPad.

Michael Devine, in a letter Sunday to U.S. District Judge Lucy Koh, said a tentative settlement involving no-hire claims against Google, Apple, Intel and Adobe "fails to achieve justice for the class."

Software engineers, on behalf of an estimated class of 64,000, sued the companies, plus Intuit and Walt Disney subsidiaries LucasFilm and Pixar, in 2010, over illegal "no cold-call agreements" that restricted or eliminated competition for high-tech employees, which "disrupted the normal price-setting mechanism that apply in the labor setting."

The poaching ban maintained internal salary structures at the companies from 2005 to 2009, workers claimed , and involved "gentleman's agreements" via CEO-to-CEO emails between the late Steve Jobs and other leading Silicon Valley CEOs.

Devine said the estimated settlement, "which was correctly reported in the press as being in the amount of $324 million," equals less than 1 percent of compensation for each class member over the duration of the alleged poaching ban.

"The evidence of the defendants' illegal conspiracy, and its intended impact, is very strong," Devine wrote. "In fact, the defendants' own actions reveal their valuation of the conspiracy. Just look at Google which, when Facebook rejected their initial overture, felt compelled to raise annual compensation 10 percent companywide to stem the flow of employees to Facebook."

Google reportedly bid on Facebook in 2004 and 2007, without success.

Devine also liked the settlement to a shoplifter caught with an iPad, allowed to walk nearly scot-free.

"As an analogy, if a shoplifter is caught on video stealing a $400 iPad from the Apple Store, would a fair and just resolution be for the shoplifter to pay Apple $40, keep the iPad, and walk away with no record or admission of wrongdoing?" Devine wrote. "Of course not, nor is such a resolution appropriate in our case. Perhaps, though, the prevalence of corporate crime is in part due to absence of real justice for the victims of the courtroom? Why, with such uniquely compelling evidence in hand, would we short circuit this case? Please, Your Honor, allow us our day in court."

Devine said he was not informed of mediation that led to the tentative agreement until a day after competing counsels "had already reached an agreement," adding he informed the plaintiffs' counsel in writing of his intent to oppose the deal.

"The tentative settlement, if it stands, amounts to big profits for plaintiffs' counsel, insulation from real liability for the defendants, and locks in a significant net loss for the class," Devine, one of four named plaintiffs in the case, said.

Lucasfilm, Pixas and Intuit agreed to pay $20 million to exit the suit late last year.

The four remaining companies notified Koh by letter in late April of their intent to settle the lawsuit, claiming the parties "reached an agreement to settle all individual and class claims alleged in the consolidated amended complaint."

Co-lead class counsel and the defendants' counsel - Kelly Dermondy with Lieff Cabraser Heimann & Bernstein, Robert Van Nest and Joseph Saveri - signed the letter.

Last week, Koh issued orders granting workers' separate motions for final approval of the settlement, which has not yet been officially announced, as well as for attorneys' fees, reimbursement of expenses and service awards.

Dermody on Tuesday said that unlike Devine the remaining class representatives fully support the proposed settlement.

Daniel Stover, Siddharth Hariharan and Mark Fichtner, in separate declarations, said attorneys at Lieff Cabraser regularly updated them regarding the case.

"My attorneys informed me of the proposed settlement with the defendants, and I agreed that the proposed settlement was fair, adequate, and reasonable," the declarations state. "I authorized my attorneys to agree to the proposed settlement."

Dermody called the settlement an "excellent result."

"This settlement was reached under the supervision of a very experienced former federal judge who supervised the negotiations," Dermody told Courthouse News. "We think it is an excellent result."

Settlement specifics, which have not yet been filed with the court, will be available no later than May 22, Dermody added.

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