(CN) – Adobe, Apple, Google and Intel have agreed to settle a high-stakes dispute over tech workers’ wages, attorneys said Tuesday.
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 other leading Silicon Valley CEOs.
Five cases underlying the consolidated action were filed in California Superior Court and removed to Federal Court.
In August 2014, U.S. District Judge Lucy Koh rejected workers’ request for preliminary approval of a $325 million settlement. Koh found the offer too low: outside “the range of reasonableness.”
Koh also ruled that although “ample evidence” showed an overarching conspiracy between the defendants, the proposed settlement was “proportionally lower” per class member than that of a separate $20 million settlement with Lucasfilm, Pixar and Intuit, in 2013.
Adobe, Apple, Google and Intel called Koh’s rejection of the proposed settlement a “clear legal error,” in September 2014.
Google attorney Robert Van Nest, of Keker & Van Nest, said Koh’s “formulaic approach” in deciding that the offer was short by 16 percent went against precedent that values negotiation and mediation over benchmarking.
The tech companies called on the 9th Circuit to use the case as an opportunity to set “the proper standard for preliminary approval of class settlements,” claiming that Koh potentially doomed the tech employees to “the very real chance that they and the absent class members will receive nothing” by rejecting the deal – the highest ever in an employment antitrust case.
Koh released separate emails, one by a Google employee and shareholder, in response to the companies’ petition.
“Real choices and opportunities were taken away from these employees due to lack of recruiting among the companies,” the worker said. “No amount of money can fix that now.”
The lawsuits followed a Justice Department investigation into the seven companies’ employment and recruitment practices, in 2009 and 2010. The DOJ filed a suit against the companies in 2010, alleging they agreed to restrict the mobility of their skilled employees.
The companies settled with the government, without admitting wrongdoing, and agreed not to enforce any agreement that kept them from soliciting, cold calling or competing for employees from one another.
Attorney Donald Falk, with Mayer Brown, announced the tech quartet’s unspecified settlement to the 9th Circuit on Tuesday.
“The parties have reached a new settlement agreement that is subject to district court approval,” Falk wrote. “The plaintiffs imminently are expected to file a motion for preliminary approval with the district court. After that filing, petitioners will make a submission to this court regarding the mandamus proceeding.”
Settlement specifics are expected to be filed Thursday.
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