Business

Judge Koh rejects the Silicon Valley $324.5M wage-theft settlement

Image Credit: Clyde Robinson/Flickr

The overseeing federal judge rejected Silicon Valley’s proposed $324.5 million wage-theft antitrust settlement today.

“Having [reviewed documents over nearly three years], the Court cannot conclude that the instant settlement falls within the range of reasonableness,” U.S. District Judge Lucy Koh wrote today in her order rejecting the settlement between the class action plaintiffs and Apple, Google, Intel, and Adobe.

“As this Court stated in its summary judgment order, there is ample evidence of an overarching conspiracy between the seven defendants.”

A key reason that Koh cited is that the settlement was proportionally less for these four companies than was received by employees of three other defendant companies — Intuit, LucasFilm, and Pixar — in a $20 million settlement a year ago.

“Using [the three earlier settlements] as a yardstick, the appropriate benchmark settlement for the Remaining Defendants would be at least $380 million,” Koh said, “more than $50 million greater than what the instant settlement provides.”

The settlement against the four companies had been announced in May and involved over 64,000 current and ex-employees. In 2011, Koh merged the various lawsuits from engineers, designers, editors, sys admins, and others who worked at the seven companies from 2005 to 2009.

The workers had claimed that the companies had agreed to avoid poaching each other’s employees, which the employees said suppressed their salaries and made their skills uncompetitive.

The plaintiffs originally sought $3 billion, a figure that could have been tripled if antitrust behavior had been proven in a trial. Some of the plaintiffs had filed objections to the size of the settlement.

Aside from the actual dollar amounts, the case had attracted attention because it revealed the cooperative arrangements between leading tech giants.

In one document made public, for example, then-Google CEO Eric Schmidt emailed Apple chief executive Steve Jobs to report that a Google recruiter was about to be fired because he attempted to hire an Apple employee.

Jobs’ reply: ” :) “

More information:

We are Intel Sponsors of Tomorrow™, not only through our technical innovation, but through our endless efforts in education, environmental sustainability, healthcare, and much, much more. The range of computing products based on ... read more »

Apple designs and markets consumer electronics, computer software, and personal computers. The company's best-known hardware products include the Macintosh line of computers, the iPod, the iPhone and the iPad. Apple software includes t... read more »

Pixar Animation Studios is an Academy Award ®-winning computer animation studio with the technical, creative and production capabilities to create a new generation of animated feature films, merchandise and other related products. Pix... read more »

Whether it's a smartphone or tablet app, a game, a video, a digital magazine, a website, or an online experience, chances are that it was touched by Adobe technology. Our tools and services enable our customers to create groundbreaking... read more »

Intuit Inc. is a leading provider of business and financial management solutions for small and mid-sized businesses; financial institutions, including banks and credit unions; consumers and accounting professionals. Its flagship produc... read more »

Google's innovative search technologies connect millions of people around the world with information every day. Founded in 1998 by Stanford Ph.D. students Larry Page and Sergey Brin, Google today is a top web property in all major glob... read more »

Lucasfilm is one of the world's leading film and entertainment companies. Lucasfilm is an American film and television production company based in the Letterman Digital Arts Center in San Francisco, California. The studio is best k... read more »

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