Don’t take my technician: Court throws out $324.5m settlement for tech firm collusion

A judge has rejected a $324.5m settlement offered by four Silicon Valley tech firms in a lawsuit brought against them by tech workers, who say that the companies colluded to not poach each other's employees. 

 

More than 64,000 of the workers have come together to take Apple, Google, Adobe and Intel to court.

 

The companies had hoped that the settlement would put an end to the case, partly because the resulting damages could be so high. The fact that there is an automatic trebling of awards in antitrust cases means that damages could reach $9bn, should the case go to trial.

 

But at a court in California on Friday, judge Lucy Koh said that the amount offered was not enough, and that it “falls below the range of reasonableness”.

 

She said that the offer “would need to total at least $380m” in order to match the settlement agreed for an earlier case involving Pixar, Lucasfilm and Intuit, which were also hit with the allegations. 

 

 

Former Apple chief executive Steve Jobs is believed to have been a key force behind the collusion, after a series of emails he had exchanged with heads of rival firms revealed the formation of plans to not take each other's top engineers.

 

“There is compelling evidence that Steve Jobs . . . was a, if not the, central figure in the alleged conspiracy,” wrote Koh. 

 

It all started when Jobs reached a no-poaching deal with George Lucas, head of Lucasfilm, over the animation studio Pixar, which Jobs controlled at the time. 

 

Other heads of companies soon began to bow down to Jobs' wishes, including Adobe chief executive Bruce Chrizen, who agreed not to approach any Apple employees. 

 

Google went so far as to fire one of its recruiters only an hour after Jobs had complained that they had approached an employee of Apple. When Jobs received an apologetic email from Google chief executive Eric Schmidt which informed him of the firing, he forwarded the email on to another Apple executive with a smiley face emoticon. 

 

The unsaid rule didn’t apply just to current employees, either; at one point Google decided not to hire three ex-Apple engineers in order not to displease Jobs. 

 

“I think Mr Jobs’ view was that people shouldn’t piss him off. And I think that things that pissed him off were – would be hiring, you know – whatever,” said Google co-founder Sergey Brin.

 

In fact, Google's Schmidt was another key player in the process, according to Koh, as was former boss of Intuit Bill Campbell.

 

A further hearing for the case is due to take place on 10 September.