Tech Giants Reach Deal to Settle ‘No Poaching’ Suit

Apple, Google, Intel and Adobe Systems to settle class-action lawsuit over secret agreements to keep their hands off each other's workforces.
Matthew HellerJanuary 14, 2015
Tech Giants Reach Deal to Settle ‘No Poaching’ Suit

In another bid to avoid a trial in a potentially embarrassing antitrust suit, four Silicon Valley giants accused of conspiring not to hire each other’s employees have reached a new $415 million settlement, The New York Times reports.

A federal judge in August had rejected an earlier $324.5 million settlement of the case, saying it was not “within the range of reasonableness.” The companies—Google, Apple, Intel, and Adobe Systems—appealed that decision but in a court filing Tuesday announced they had “reached a new settlement agreement” with a class of 64,000 software engineers.

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worker lawsuit server-workersThe notice did not specify a settlement amount but the Times, citing a source close to the negotiations, said the companies are offering a joint payment of $415 million.

U.S. District Judge Lucy H. Koh had indicated they should shell out at least $380 million to settle the class allegations that top executives of the tech giants, including late Apple CEO Steve Jobs and former Google CEO Eric Schmidt, cut secret deals to keep each other from raiding rival workforces, suppressing wages from 2005 to 2009.

“The settlement money is pocket change to the companies, which include some of the world’s wealthiest,” the Times noted. “If they let the case go to trial, however, it might corrode their image as forward-thinking, worker-friendly benevolent empires.”

The secret no-poaching deals first came to light after an investigation by the Justice Department that resulted in antitrust complaints against Google, Apple, Intel, Intuit, Adobe, Pixar and Lucasfilm. The companies settled the government’s claims without admitting guilt or paying any fines.

After Pixar, Intuit and Lucasfilm settled class-action claims for $20 million, the other companies originally offered to settle for $324.5 million. One of the named plaintiffs opposed the deal, saying it would bring the plaintiffs’ attorneys $8 million in legal fees, while the affected workers would average about $5,000 apiece.

If Judge Koh does not approve the new settlement, the case will go to trial on April 10.