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Judge rejects proposed $324.5M anti-poaching case settlement

updated 04:23 pm EDT, Fri August 8, 2014

Deal 'falls below the range of reasonableness'

US District Judge Lucy Koh has rejected a proposed $324.5 million settlement in the lawsuit direct against Apple, Adobe, Google, and Intel over anti-poaching practices. In her ruling, Koh states that the amount offered "falls below the range of reasonableness."

The lawsuit accuses the corporations of conspiring in the 2000s to avoid hiring from each other's workforces. Although this prevented projects from being disrupted, it also protected the companies from having to compete with each other in terms of wages and benefits.

Judge Koh ruled that "ample evidence of an overarching conspiracy" and was concerned that the fund didn't pay enough money to employees that hadn't reached a separate settlement with the quartet of tech companies. The Judge did give guidance on what she thought was an acceptable fund amount, declaring that $380 million should be sufficient, $55.5 million more than the proposal.

A settlement was likely forced by a series of 2005 emails between Apple's Steve Jobs and Google's Sergey Brin, proving that they agreed not to hire from each other's businesses. A Google policy document hinted at a still-wider conspiracy involving firms not even targeted in the lawsuit, such as Comcast, Microsoft, and Oracle.

Judge Denies Techtopus Settlement Aug2014a by pandoeditorial



By Electronista Staff
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Comments

  1. SpinCycle

    Forum Regular

    Joined: 02-27-00

    I don't think this Judge understands much of what she presides over.
    Did Bromwich decide this for her?

  1. prl99

    Dedicated MacNNer

    Joined: 03-24-09

    So, the companies and plaintiff's lawyers agreed to a settlement yet a judge feels she can squeeze more out of the companies? Since when did Koh start making the law instead of adjudicating it? She's got Apple in her crosshairs and anyone associated with them is her target.

  1. SpinCycle

    Forum Regular

    Joined: 02-27-00

    I don't think this Judge understands much of what she presides over.
    Did Bromwich decide this for her?

  1. SpinCycle

    Forum Regular

    Joined: 02-27-00

    I agree with you 100% prl99

  1. The Vicar

    Junior Member

    Joined: 07-01-09

    How many employees are effected, and how long did this go on? We can only tell whether the employees are being treated reasonably if we can say how much compensation they're getting — if there are one hundred thousand employees who had their wages lowered (either at time of hire or by not receiving raises) over a period of ten years, we're only talking about $324 of compensation per year of lowered salary per worker, which really ISN'T reasonable, by a full order of magnitude. (And that's not counting the chunk that the lawyers will get.)

    And it has to be kept in mind that Koh and her fellow judges typically side with large companies against individuals (even in class action suits). Fines for actions which damage the public tend to be put at levels which companies will make back within weeks, changing the fines from "deterrent against illegal behavior" to "cost of doing business", which is bad for everyone in the long term. If $324.5 million isn't acceptable, but $380 million would be, then it suggests that $380 is still less than the amount the companies gouged out of their own employees.

  1. chas_m

    MacNN Staff

    Joined: 08-04-01

    SpinCycle: you're confusing your judges. Judge Cote is the one who assigned Michael Bromwich; Judge Koh is in charge of a different court entirely, on the complete other end of the country.

  1. Flying Meat

    Dedicated MacNNer

    Joined: 01-25-07

    Koh has not been recognizably pro, or anti Apple in her cases involving them, and this judgement is against a collection of companies, not just Apple, so...

  1. prl99

    Dedicated MacNNer

    Joined: 03-24-09

    Originally Posted by Flying MeatView Post

    Koh has not been recognizably pro, or anti Apple in her cases involving them, and this judgement is against a collection of companies, not just Apple, so...


    Not totally true. Koh seems to be the judge on just about everything Apple related and she has reluctantly allowed juries to be in Apple's favor even though she has allowed Samsung get away without paying for any settlements from those juries.

    As for this trial, yes, Apple is just one of several companies but I bet if they weren't included, it would not be news and any settlement would have been much less. I find the anti-poaching laws to be interesting as well. I remember times when people were not able to go to a competitor for at least 6 months. Now it seems this is against the law. Where I used to work, we would complain that we were the training grounds for every high-level computing job in the country because we couldn't compete on the basis of salary (government job). This is why these companies did what they did. They needed to protect their trade secrets. Of course this is anti-employee but if you're going to fine these companies then you need to fine all of them and also go after every company breaking the law, not just Apple (and those who get caught in their wake).

  1. que_ball

    Fresh-Faced Recruit

    Joined: 08-14-00

    It seems that the companies provided evidence that they saved far more than the settlement amount in salary costs.

    I guess the judge is saying that companies breaking the law should actually be punished when found guilty rather than paying a discount on the minimum amount they would have been expected to pay if they were following the law.

    The equivalent to an individual would be stealing $1000 and only having to pay back $100 as a civil penalty and having no criminal record. Not much of a deterrent if it's cheaper to break the law. Why would they stop?

  1. Flying Meat

    Dedicated MacNNer

    Joined: 01-25-07

    que_ball: It seems more like an individual enters into an agreement with others that take questionable steps to avoid paying "potentially" $1000, but when discovered, only has to pay $100 as a civil...

    I do not disagree that generally speaking, corporations get ridiculously small slaps on the wrist for infractions, when some of those corporations should really just be put out of business. However, that would not be pretty either.

  1. burger

    Forum Regular

    Joined: 09-13-00

    While I do think the whole anti-poaching thing is questionable, I thought it was only limiting in aggressive poaching of employees. Meaning, Google couldn't specifically call an Apple employee to hire them away, but it did not limit that same employee from seeking Google employment on his own. I'm probably wrong.

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