The anti-competitive lawsuit filed against some of the largest tech companies in the United States (“Silicon Valley Anti-Poaching Suit Gets Go Ahead”) has been controversial – or at least highly newsworthy – since its beginning. The initial allegations were staggering: had companies really agreed not to hire each other’s workers? Doing so violated employees’ basic rights to freely seek better employment and compete for better pay, yet evidence suggested that Apple, Google, Intuit, Adobe, Pixar, Intel and Lucasfilm had all conspired to prevent employees from leaving to work for competitors.
Evidence suggested that Apple, Google, Intuit, Adobe, Pixar, Intel and Lucasfilm and Intuit had all conspired to prevent employees from leaving to work for competitors.
As the case progressed, it became increasingly obvious that company bosses had made secret pacts, and that thousands of workers had been denied potential opportunities to further their careers. Talk moved to the terms of potential settlements, with a $324 million agreement announced in May between plaintiffs and Adobe, Apple, Google and Intel. At the time, however, trouble was already brewing as Michael Devine, one of the class representatives, publically criticized his attorneys’ decision to settle for far less than the proposed $3 billion. Devine wrote that:
“[I] was not informed that the most recent round of mediation that led to the tentative settlement was even taking place until the day after Plaintiffs’ and Defendants’ counsel had already reached an agreement.”
This rare showing of rift between a plaintiff and his attorneys – coupled with the size of the potential damages – brought even more heat to the case. Devine set up a website calling for tech worker justice and published a letter to Judge Lucy Koh claiming that:
“The evidence of the Defendants’ illegal conspiracy, and its intended impact, is very strong. In fact, the Defendants’ own actions reveal their valuation of the conspiracy. . Just look at Google which, when Facebook rejected their illegal overture, felt compelled to raise annual compensation 10% companywide to stem the flow of employees to Facebook. This settlement, in contrast, will amount to less than 1% of compensation for each class member over the duration of the illegal agreements. That’s one tenth of the experts’ estimates of damages and is lacking in any penalty. There’s no justice for the Class in that, nor is there any real deterrent to future wrongdoing. We want a chance at achieving real justice.”
At the time, it looked like Judge Koh would be unmoved by Devine’s push for a larger settlement. On June 5, with new legal representation, Devine filed an opposition to the proposed settlement. Then, last week, Judge Koh finally expressed some sympathy for the plaintiffs, and aired her own doubts about the proposed settlement. At a court hearing, she admitted that:
“I just have concerns about whether this is really fair to the class.”
In response, one of the plaintiffs’ attorneys highlighted the risk of appeal if the case moved forward – compounded, she said, by the Supreme Court’s increasingly anti-class action stance. Still, Koh was hesitant, indicating that the current case was, in her view, solid and would most likely be able to stand up to any Supreme Court challenges.
For Devine and those who want to hold out for a greater settlement, that may be good news. However, Koh also expressed approval for the settlement’s terms that would allow all plaintiffs to collect money, even if they haven’t filed a paper claim. How will she rule, in the end? There’s a lot riding on that, but no way to know.
Judge Koh has already approved separate settlements for Walt Disney Co.’s Lucasfilm and Pixar units, along with Intuit Inc. The circumstances surrounding Apple, Google, Intel, and Adobe, though, are clearly unusual and warrant careful handling. There’s a big difference between $300 million and $3 billion – and with so many interested parties, any decision is going to come under heavy criticism.