April 25, 2014
Apple, Other Tech Giants Offer Big Bucks To Settle Wage-Fixing Lawsuit
Peter Suciu for redOrbit.com - Your Universe Online
Even as unemployment remains high nationwide, in some part of the country good help is increasingly hard to find. This is especially true in the tech sector where companies recruit students out of college and start-ups are often bought just for the talent pool. However, some of the biggest names in technology apparently had a sort of secret agreement not to poach on each other’s employees.On Thursday, Apple, Google, Intel and Adobe agreed to an out-of-court settlement, reported Reuters, which was first to break the story.
The terms of the deal were not disclosed, but the defendants’ counsel wrote jointly to inform the court that they had reached an agreement to settle all individual and class claims alleged in the consolidated amended complaint.
The class-action complaint, which was filed in 2011, was brought forward on behalf of some 60,000 workers in Silicon Valley and a trial was scheduled to begin next month. Apple and the other companies reportedly faced a “blindingly high” sum of $9 billion in the lawsuit.
Apple Insider reported, “The employees involved in the suit were seeking a payment of about $90,000 per person — a considerable sum that they apparently felt confident about because of the strong evidence presented in the case. Some of the key evidence involved late Apple co-founder Steve Jobs, who placed a call to Google's Sergey Brin and threatened ‘war’ over recruitment efforts from the rival company.”
The companies have said little since agreeing to the settlement. However, Intel went on record on Thursday.
“We are settling this matter to avoid the risks of litigation,” Chuck Mulloy of Intel said in a statement, as reported by the Wall Street Journal. “We still deny violating any laws or obligations to plaintiffs.”
An Adobe spokesperson added in a statement, “We have elected to settle this matter in order to avoid the uncertainties, cost and distraction of litigation.”
Apple and Google both declined to comment.
While the employees had been seeking some $3 billion in damages that sum could have been tripled to $9 billion under current antitrust rules. The final payout will be substantially less however. Reuters reported that the four major tech companies agreed to pay out a total of $324 million to settle the case. Any settlement must now be approved by US District Judge Lucy Koh in San Jose, California.
“We’re pleased with the results,” Kelly M. Dermody, a lawyer for the plaintiffs at Lieff Cabraser Heimann & Bernstein LLP, told the WSJ. He added that the attorneys “have had their heads down working furiously on this for months."
“I am pleased with the result, and it will serve the class well,” added Mark Fichtner, one of the named plaintiffs and a former Intel software engineer.
This isn’t the first time the companies have been down this apparent road.
In 2010 the same four companies faced similar charges and settled a civil suit.
“At the time, the U.S. Justice Department noted that ‘cold calling’ or companies recruiting from competitors’ ranks was best for the worker: ‘This form of competition, when unrestrained, results in better career opportunities,’” Time.com reported.
Thursday’s settlement also follows a similar agreement reached last year with Lucasfilm Ltd., Pixar and Intuit Inc., which paid a combined $20 million.