Judge rejects settlement in Silicon Valley wage-fixing case
14 August 2014
A US judge has rejected a $324.5m settlement in a Silicon Valley wage-fixing case in which firms such as Google and Apple were accused of agreeing not to poach staff.
Thu, Aug 14 2014A US judge has rejected a $324.5m settlement in a Silicon Valley wage-fixing case in which firms such as Google and Apple were accused of agreeing not to poach staff.
Employees of the firms, which also included Intel and Adobe, brought a class action lawsuit against the companies, alleging non-competitive hiring practice and therefore suppression of wages.
According to Californian District Court Judge Lucy Koh’s written decision, dated 8 August, the settlement agreement was reached in April, a month before the trial was set to begin. The employees were set to ask for $3bn at the trial, which could have tripled to $9bn under US anti-trust laws.
Koh said the settlement amount was too low, especially given the strength of the case against the companies.
She said there was compelling evidence that the companies “extensively discussed and enforced the anti-solicitation agreements”, adding that Apple’s Steve Jobs “was a, if not the, central figure in the alleged conspiracy”.
“The court cannot conclude that the instant settlement falls within the range of reasonableness,” she said.
Koh was also “troubled” that the settlement was proportionately lower than an earlier settlement reached with other companies involved in the alleged conspiracy, Pixar, Lucasfilm and Intuit.
A further hearing is set for 10 September.
Employees of the firms, which also included Intel and Adobe, brought a class action lawsuit against the companies, alleging non-competitive hiring practice and therefore suppression of wages.
According to Californian District Court Judge Lucy Koh’s written decision, dated 8 August, the settlement agreement was reached in April, a month before the trial was set to begin. The employees were set to ask for $3bn at the trial, which could have tripled to $9bn under US anti-trust laws.
Koh said the settlement amount was too low, especially given the strength of the case against the companies.
She said there was compelling evidence that the companies “extensively discussed and enforced the anti-solicitation agreements”, adding that Apple’s Steve Jobs “was a, if not the, central figure in the alleged conspiracy”.
“The court cannot conclude that the instant settlement falls within the range of reasonableness,” she said.
Koh was also “troubled” that the settlement was proportionately lower than an earlier settlement reached with other companies involved in the alleged conspiracy, Pixar, Lucasfilm and Intuit.
A further hearing is set for 10 September.
