Google, Apple, Intel and Adobe Systems have agreed to pay US$324.5 million to settle a class-action lawsuit that accused the companies of entering into secret agreements not to hire each others’ workers, according to a filing seeking preliminary approval of the settlement.
The filing late Thursday in the U.S. District Court for the Northern District of California, San Jose division by lawyers for class representatives Mark Fichtner, Siddharth Hariharan, and Daniel Stover states that the companies will deposit an initial sum of $1 million from the settlement amount into an escrow account within 10 days of the preliminary approval, to be used for notice and administration costs.
The remaining $323.5 million will be paid into the account after the final approval of the settlement.
Class members who do not opt out will be eligible to receive a share of the settlement fund, based on a formula set on the basic salary paid during the relevant period.
Each of the named plaintiffs also get in addition “service award payments” of $80,000 for their services as class representatives. They worked in technical positions for the companies in the settlement, and “incurred the substantial risks and costs of taking on leadership roles in this visible litigation against seven of the most prominent technology firms in the world,” according to the filing.
The attorneys’ fees and reimbursement of costs and expenses are also to be paid from the settlement fund.
The four companies and the employees had informed the court of a settlement in a filing in April but had not disclosed the sum and other terms of the settlement.
One class representative Michael Devine has since objected to the settlement, stating that the amount was too small. In a letter to District Judge Lucy Koh, earlier this month, Devine wrote that he was not informed “that the most recent round of mediation that lead to the tentative settlement was even taking place until the day after Plaintiffs’ and Defendants’ counsel had already reached an agreement.”
Intuit, Lucasfilm and Pixar had previously settled for about $20 million.
The complaint filed by five engineers alleged that Adobe, Apple, Google, Intel, Intuit, Lucasfilm and Pixar, all high-tech companies with principal place of business in the San Francisco-Silicon Valley area of California, had engaged in an “overarching conspiracy” to fix and suppress employee compensation and to restrict employee mobility.
The companies were said to have set up “Do Not Call” lists, putting each firm’s employees off-limits to the other companies, with instructions to recruiters not to “cold call” these employees.
The seven companies settled similar charges in 2010 with the U.S. Department of Justice while admitting no wrongdoing, but agreed not to ban cold calling and enter into any agreements that prevent competition for employees.
The employees held that the DOJ put an end to the allegedly illegal agreements, but the government was unable to compensate the victims of the conspiracy, which was the reason why they were filing a suit. Top tech executives including former Apple CEO and cofounder Steve Jobs were said to have monitored and enforced the anti-poaching agreements.