Apple and Others End Anti-Poaching Lawsuit With Payout
Apple (NASDAQ:AAPL), Google (NASDAQ:GOOG) (NASDAQ:GOOGL), Adobe (NASDAQ:ADBE), and Intel (NASDAQ:INTC) have agreed to pay a combined total of $324.5 million to settle a long-running class action lawsuit that involves approximately 64,000 former employees, reports Reuters. The antitrust case originated in 2011 when several software engineers accused the tech companies of conspiring to limit employees’ wages by secretly agreeing not to poach workers from each other. With lawyers expected to take about 25 percent, or $80 million, of the total settlement amount, each worker will receive a payout between $2,000 and $8,000, according to Apple Insider.
The parties have requested that U.S. District Judge Lucy Koh approve the agreement at a hearing scheduled for June 19. However, one of the plaintiffs in the case — Michael Devine — has objected to the amount of the settlement, which is far less than what the workers could have potentially won in a courtroom. According to court documents seen by Reuters, the plaintiffs had originally planned to seek about $3 billion in damages. However, employees could have been eligible for up to $9 billion, since damages can be tripled under antitrust law.
Despite Devine’s objection, the lawyers for the other plaintiffs have asked the court to approve the settlement and have pointed to other antitrust cases that ended with similarly reduced out-of-court settlement amounts. “The amount of the settlement does not relate to the size or profitability of the companies we sued,” noted Joseph Saveri, one of the lawyers for the plaintiffs, according to Reuters. “It relates to the claims we made, the law that applies to them, and the facts that we could prove at trial. Based on that, I think the settlement is a significant achievement.” As noted by Reuters, the four companies involved in the anti-poaching conspiracy made a combined profit of around $60 billion in their latest fiscal years and approximately 60 percent of that amount was made by Apple.
The case was granted class action status by Judge Koh when the plaintiffs demonstrated that their lawsuits had enough in common to allow them to sue together. The claims made by the employees in this lawsuit echoed the allegations made in a 2010 U.S. Department of Justice probe of seven tech companies’ hiring practices. The Justice Department probe ended after the companies agreed to stop their anticompetitive employment practices. However, the Justice Department’s probe exposed compromising emails from Apple’s former CEO Steve Jobs and Google’s Eric Schmidt that showed that the executives maintained secret no-solicitation agreements with each other’s companies.
Intuit (NASDAQ:INTU) and Disney’s (NYSE:DIS) Lucasfilm and Pixar units were also alleged to be part of the conspiracy, but opted to quickly settle out of court, rather than dispute the workers’ accusations. According to Reuters, Disney agreed to pay approximately $9 million and Intuit agreed to pay about $11 million. On the other hand, until last month, Apple, Google, Adobe, and Intel were continuing to fight the allegations of antitrust violations.
In March, the class action lawsuit was allowed to proceed after Judge Lucy Koh rejected the companies’ request for a summary judgment without a trial, reports Reuters.
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