A settlement between Apple, three other IT outfits and their employees has been rejected by a judge saying it was too low given the strength of the case against the employers.
Apple, Google, Intel and Adobe failed to persuade US District Judge Lucy Koh to sign off on a $324.5 million settlement to resolve a lawsuit by tech workers, who accused the firms of conspiring to avoid poaching each other’s employees.
Koh in San Jose, California, said there was “substantial and compelling evidence” that Apple Messiage founder Steve Jobs “was a, if not the, central figure in the alleged conspiracy,” Koh wrote
In their 2011 lawsuit, the tech employees said the conspiracy had limited their job mobility and, as a result, kept a lid on salaries. The case has been closely watched because of the possibility of big damages being awarded and for the opportunity to peek into the world of some of America’s elite tech outfits.
The whole case was based largely on emails in which Jobs and Google’s Eric Schmidt hatched plans to avoid poaching each other’s prized engineers.
In rejecting the settlement, Koh referred to one email exchange which occurred after a Google recruiter solicited an Apple employee. Schmidt told Jobs that the recruiter would be fired. Jobs then forwarded Schmidt’s note to a top Apple human resources executive with a smiley face.
The four companies agreed to settle with the workers in April shortly before trial. The plaintiffs had planned to ask for about $3 billion in damages at trial, which could have tripled to $9 billion under antitrust law.
The plaintiffs are worried because workers faced serious risks on appeal had the case gone forward.
But Koh repeatedly referred to a related settlement last year involving Disney and Intuit. Apple and Google workers got proportionally less in the latest deal compared to the one involving Disney under the settlement.
To match the earlier settlement, the latest deal “would need to total at least $380 million,” Koh wrote.
A further hearing in the case is scheduled for September 10.
