Court Nixes Apple, Google, Intel Job-Poaching Settlement

A California judge rejected a proposed $324.5 million settlement by Google, Apple, Intel and Adobe to resolve a class-action employment lawsuit.

Google, Apple, Intel Employment Lawsuit

A California judge has ruled that a $324.5 million settlement offer from companies including Google and Apple is not enough to resolve a class-action lawsuit brought by some 64,000 former employees who alleged that the companies colluded to block employees from working for rivals.

The ruling by U.S. District Judge Lucy Koh in San Jose, Calif., on Aug. 8 called the proposed settlement too low, according to a story by Reuters.

In her opinion, Koh wrote that there was "substantial and compelling evidence" that Apple's co-founder and former leader, the late Steve Jobs "was a, if not the, central figure in the alleged conspiracy," according to Reuters. "The judge provided details in evidence of anecdotes involving Jobs and other [Silicon] Valley executives to show why she thought the workers deserved more."

The $324.5 million settlement, which was proposed in April, also included Intel and Adobe as defendants. The lawsuit alleged that the four companies had illegally conspired to control salaries by not recruiting employees who worked for each other's operations.

"Koh referred to one email exchange which occurred after a Google recruiter solicited an Apple employee," according to the article. "[Google executive chairman Eric] Schmidt told Jobs that the recruiter would be fired. Jobs then forwarded Schmidt's note to a top Apple human resources executive with a smiley face."

Back in April 2010, the U.S. Department of Justice began investigating the hiring practices of Google, Apple and other companies, according to an eWEEK report. The hiring practices at that time allegedly included agreements to not poach each other's top talent, which could violate antitrust and labor laws. The federal government had previously investigated Google, Apple and other companies over similar deals. The class-action lawsuit targeted the companies in civil court following the government investigation.

The case has been very visible in Silicon Valley and across the nation because it involves some of the most important technology companies in the United States and their leaders. That included Apple's Jobs, who allegedly sent emails describing the strategy and practice of not hiring workers from other companies to limit such poaching.

In May, one of the four named plaintiffs in the case, Michael Devine, told the court that he objected to the proposed settlement because it amounted to only about one-tenth of the $3 billion in damages the plaintiffs were originally seeking, according to an earlier eWEEK report. That $3 billion amount could have ultimately been tripled to $9 billion under U.S. antitrust laws had the case gone to trial.

Under the proposed settlement, Devine, one of the four named plaintiffs in the original case, would receive about $80,000 in damages, while other class-action members of the suit would get about $4,000 each.

A further hearing in the case is scheduled for September 10, according to Reuters.

Google, Apple and other companies also found themselves in the headlines in January 2014, not for their products but for their involvement in a dispute in the San Francisco Bay Area involving corporate buses the companies use to shuttle their employees back and forth to their jobs. The dispute arose because the companies had not contributed money to the city for the upkeep of the bus stops that were used by the corporate vehicles. The use of the stops without compensation inspired protests by local activists who opposed the practice. In January, an agreement was reached between the city and the companies to establish fees for the use of the bus stops.

In December 2013, a Google commuter bus that whisked employees to and from their San Francisco neighborhoods to their workplace some 34 miles away in Mountain View, Calif., was blocked from proceeding by a group of protestors who oppose the Google buses for traffic and economic reasons, according to an earlier eWEEK report.