Judge Rejects Settlement, Forces Class-Action Suit Against Silicon Valley Giants to Trial

Judge Rejects Settlement, Forces Class-Action Suit Against Silicon Valley Giants to Trial

The New York Times reports that Judge Lucy H. Koh of the United States District Court in San Jose rejected a proposed settlement in a class action suit against Google, Apple, Intel, and Adobe, saying that it wasn’t enough to compensate workers whose careers were allegedly stifled by the companies’ tacit agreement not to hire each others’ workers.

She asserted that there was “ample evidence” that Silicon Valley was engaged in “an overarching conspiracy” against its own employees and forced the case to go to trial. A spokesman for Intel said, “We are disappointed that the court has rejected preliminary approval of an agreement that was negotiated at arm’s length over many months.” 

Lucasfilm, Pixar and Intuit, which were also named in the original lawsuit, reached settlements last year.

The proposed deal was made in April, but Koh said it wasn’t “within the range of reasonableness.” Once the lawyers were paid, the plaintiffs would each get $4,000. Koh insisted that the plaintiffs were underselling themselves.

Daniel Crane, who teaches antitrust law at the University of Michigan Law School, told the Times, “I cannot recall a judge saying in a class-action case that the amount of settlement is too low and you need to go back and go for broke at trial. This is very striking.”

Yet evidence was striking in favor of the plaintiffs; documents procured for the court showed that in 2005, Google was interested in some Apple engineers, but Jobs wrote, “If you hire a single one of these people, that means war.” Koh pointed out that a jury “would have found these documents very significant and pretty compelling.”

The anti-poaching agreements were promulgated in the 1980s, but the class action suit asserts that the problem got worse in the last ten years as Google exploded and more engineers were needed. 

There is a possibility that emails of Steve Jobs, the founder of Apple, might be used against his company. Koh stated that Jobs was “a, if not the, central figure in the alleged conspiracy.”

Sergey Brin, Google’s co-founder, said that Jobs was known for his intolerance of being challenged, saying that what would have set Jobs off “would be hiring, you know – whatever.” Eric Schmidt of Google once said, “Steve was unhappy, and Steve’s unhappiness absolutely influenced the change we made in recruiting practice.” Jobs reportedly even managed to help get a Google recruiter fired when he was trying to hire an Apple employee.