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Sunday, May 19, 2024 | Back issues
Courthouse News Service Courthouse News Service

Tech-Hiring Ring Will Cost $300-Plus Million

(CN) - Tech giants including Apple and Google have agreed to pay disgruntled tech workers as much as $324 million to settle a contentious wage dispute, weeks before the class action headed to trial.

Software engineers in 2010 claimed Adobe, Apple, Google, Intel and Intuit, and Walt Disney subsidiaries LucasFilm and Pixar, made illegal "no cold-call agreements" to restrict or eliminate 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 in the class action claimed, and involved "gentleman's agreements" via CEO-to-CEO emails between the late Steve Jobs and other leading Silicon Valley CEOs.

The conspiracy violated the Sherman and Clayton Antitrust Acts and was revealed by the U.S. Department of Justice in 2010.

However, because the federal government was unable to compensate victims of the conspiracy, the plaintiffs filed the action privately and on behalf of a proposed class.

"Defendants' joint course of conduct included a web of bilateral agreements not to compete for each other's employees. The agreements all prohibited the companies' solicitation of any of their employees, regardless of geography, job description, or time period," according to a 2012 motion for class certification.

"The defendants memorialized these agreements in CEO-to-CEO emails and other documents, including 'do not call' lists putting each firm's employees off-limits to other defendants. These 'gentleman's agreements,' as defendants called them, centered around three of the most important figures in Silicon Valley: Apple CEO Steve Jobs, Google CEO Eric Schmidt, and Intuit Chairman Bill Campbell, all of whom served together on Apple's board of directors throughout the conspiracy."

Intuit, Lucasfilm and Pixar agreed in 2013 to pay $20 million to settle the claims, leaving Adobe, Apple, Google and Intel in a back-and-forth with their former workers involving heavily scrutinized expert testimony.

The initial settlement covered a class of employees working in the technical, creative, or research and development fields who were employed on a salaried basis by the seven companies from varying dates up until December 2009, and cut the class in half.

U.S. District Judge Lucy Koh scolded workers for attempting to "sandbag" the defense with new analysis by economist-statistician Edward Leamer.

The workers had touted a new theory by Leamer, who said the agreements had a widespread, adverse effect on pay, months after his initial report, Koh said while rejecting a motion by the defendants for summary judgment.

"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.

On Friday, the four remaining companies notified Koh by letter 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.

Reuters reported the companies agreed to pay a total of $324 million to settle the lawsuit.

The letter did not specify the amount.

A trial was slated to begin at the end of May on behalf of roughly 64,000 workers in the civil antitrust class action.

"The parties are available to arrange a telephone conference with the court if the court would like additional information," the letter states. "The terms of the settlement are currently nonpublic."

Documentation of the proposed settlement is to be submitted for consideration by May 27.

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