SAN JOSE, Calif. (CN) – A federal judge indicated she would grant preliminary approval of a $415 million class action settlement in a contentious wage dispute between software engineers and tech giants Apple, Google, Intel and Adobe.
The settlement is $35 million more than what was offered and denied by U.S. District Judge Lucy Koh last year. The companies officially upped their offer to $415 million in January.
“We’re pleased the court indicated that she is going to approve the settlement,” lead class attorney Kelly Dermody, with Leiff Cabraser Heimann & Bernstein, said after the hearing.
Reporters noted that Koh sounded “very different,” from the August 2014 hearing that ended in her rejecting a $325 million proposed settlement that she said fell below “the range of reasonableness.”
Software engineers, on behalf of an estimated class of 64,000, sued the tech giants – 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, workers claimed, maintained internal salary structures at the companies from 2005 to 2009 and involved “gentleman’s agreements” via CEO-to-CEO emails between the late Steve Jobs and the heads of other leading Silicon Valley companies.
Five state-court cases were consolidated and removed to Koh’s court. Lucasfilm, Pixar and Intuit reached a $20 million settlement with the class in 2013.
On Monday, Koh appeared to have few objections to the new offer, only remarking that one attorney’s $1 million lodestar, or method of calculating his fee, seemed too high.
“There will be an opportunity to address this issue at a later time. But a million dollar lodestar for what you described seems high to me. Even a $100,000 lodestar seems high for what you described,” she said after attorney Daniel Girard of Girard Gibbs detailed the work he performed on behalf of Michael Devine, one of the named plaintiffs.
Devine is also requesting a higher service award of $160,000.
“He took a risk in objecting to the initial settlement put before the court, and it carried with it a particular degree of courage,” Girard said, noting the potential impact on Devine’s ability to get another job in the tech industry. “It’s not that he wants to distinguish himself from the other representatives and get more. He just wants us to put his position before the court.”
Dermody told Koh that she took no position on the request but added, “All the plaintiffs, including Mr. Devine, made sacrifices and put time and effort into this case. They did a heroic job in this case. If the court is inclined to recognize a larger award, then we’re grateful, but we humbly suggest it be the same for all of them.”
The other class representatives – Mark Fichtner, Siddharth Hariharan, Daniel Stover and the estate of the late Brandon Marshall – are all asking for $80,000 at this time. Koh said she will allow all the class representatives to argue for higher awards, but added that she isn’t inclined to grant them.
“At this point I haven’t made a decision and I’m not inclined to keep whittling away the money for the class,” Koh told Girard. “I’m not going to say at all that I’m going to grant that, but I will allow it to be argued.”
The class representatives present in the courtroom declined to speak, but one class member sent a letter on Feb. 20 objecting to the proposed settlement.
“I believe this proposal still grossly falls short of the potential lost wages over the period of time in question for the average professional employed in these companies,” Michael Gambuzza wrote, urging Koh to let the case go to trial. “I think it’s about time large corporations begin to take responsibility for their actions and a clear message should be sent to stop unfair business practices.”
A final approval hearing is set for July 9.
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