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Tuesday, July 23, 2024 | Back issues
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‘Sandbagging’ Decried in Action Over Tech Wages

(CN) - The high-stakes wage dispute hanging over Apple and other tech giants will feature much of the proffered expert testimony, though a federal judge scolded workers for attempting to "sandbag" the defense with new analysis.

Five software engineers lead the consolidated class action alleging that a poaching ban maintained stable internal salary structures at Adobe, Apple, Google, Intel, Intuit, Lucasfilm and Disney Pixar from 2005 to 2009.

Workers say the companies reached the "gentleman's agreements" via CEO-to-CEO emails, which included the late Steve Jobs and other leading Silicon Valley CEOs.

U.S. District Judge Lucy Koh had refused last year to strike expert reports from both parties, which included testimony for the class by economist and statistician Dr. Edward Leamer, who said the alleged agreements had a widespread, adverse effect on pay.

The plaintiffs said that the Justice Department, which concluded that the agreements "disrupted the normal price-setting mechanisms" and thereby suppressed compensation, has corroborated Leamer's analysis.

Koh also previously preserved a report by defense expert Dr. Kevin Murphy, whom the plaintiffs accused of relying on information from "handpicked declarants."

In doing so the judge had mentioned her "concerns that plaintiffs' examples, though compelling, may not be sufficient to show that all or nearly all class members were affected by the anti-solicitation agreements without additional documentary support or empirical analysis."

The plaintiffs claimed the attack on Leamer, whom the defendants deemed "unreliable," relied "on factually incorrect and unscientific assumptions" put forth by Murphy.

Koh agreed Friday, however, to strike part Leamer's testimony under a 1993 Supreme Court decision. Daubert v. Merrell Dow Pharmaceuticals Inc. requires trial courts to perform a "gatekeeping" function to determine the admissibility of expert witness testimony.

In her 48-page ruling, Koh slams the plaintiffs for touting a new theory by Leamer, months after his opening report, in violation of a rule 26(a)(2)(B) requirement that an expert witness's opening report contain "a complete statement of all opinions the witness will express and the basis and reasons for them" together with "the facts or data considered by the witness in forming them."

Leamer argued for the first time in December 2013 that so-called "null hypothesis testing" should be used to assess the reliability of his regression model, Koh found.

"Plaintiffs will not be allowed to 'sandbag' defendants with new analysis that should have been included at the very least in Dr. Leamer's opening merits report," she wrote.

Koh nevertheless rejected an argument by the defendants "that plaintiffs should not be able to rely on Dr. Leamer's model as evidence that each class member was injured - i.e., that Dr. Leamer's regression is irrelevant to the issue of classwide impact."

"This court already concluded, when ruling on plaintiffs' first class certification motion, that Dr. Leamer's conduct regression was a reasonable methodology capable of showing that the anti-solicitation agreements caused 'generalized harm to the class,'" Koh wrote.

Having rejected part of the motion to exclude, Koh also denied the defendants summary judgment.

"Defendants' sole argument in support of their joint motion for summary judgment is that '[w]ithout Dr. Leamer's expert report and testimony, plaintiffs have no evidence of classwide impact or damages and cannot prove the essential elements of their antitrust claim,'" Koh wrote.

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