US judge says settlement from Adobe, Apple, Google and Intel over an alleged pact not to hire each others’ employees is too low
A US judge has rejected a settlement offer made by Adobe, Apple, Google and Intel to end an class action antitrust lawsuit filed by technology workers who accuse the four firms of maintaining an “anti-poaching” agreement that impacts job mobility and limits earning ability.
The defendants had offered $324.5 million to settle the case, but Judge Lucy Koh of the US District Court for the Northern District of California said the amount was too low given the strength of evidence against the defendants.
This pact included six alleged bilateral agreements that would prevent any cold-calling and aggressive acquisitions of employees from rival companies.
These were agreed between 2005 and 2007, but in 2012 Google was able to secure a senior member of Apple staff for the first time with the hire of director of product integrity Simon Prakash –indicating that these agreements are possibly no longer in effect.
According to Reuters, Koh referred to emails between the late Apple CEO Steve Jobs, who was deemed to be a ring leader in the alleged conspiracy, and Google chief executive Eric Schmidt, which detailed the supposed pact not to headhunt each other’s employees.
One particular exchange mentioned took place in 2006 when Google abandoned plans to open an engineering office in Paris because of Jobs’ “strong preference” that the search giant did not recruit four Apple engineers central to the project.
Reuters reports that the plaintiffs had intended to ask for $3 billion, but this amount could have increased to $9 billion if the case had gone to court. Koh has said any settlement should be at least $380 million, but says the plaintiffs will need to prove how the alleged agreement impacted wages.
Koh referred to how in 2007, Google offered counteroffers to any employee approached by Facebook within one hour and eventually increased wages by ten percent to combat the threat from the social network. Google also tried to enter a no-poaching pact with Facebook, said the Judge.
Some members of the class action suit were keen to settle because of the threat of appeals reducing any damages awarded in a trial, but others are keen to bring the defendants back to the negotiating table in the hope of extracting a greater settlement.
The next court date is scheduled for 10 September.
How well do you know Apple? Take our quiz.