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Judge Rejects $324 Million Settlement of Employee Wage Price Fixing Case Against Apple, Google and Other High Tech Employers

Before a lawsuit reaches the trial stage, the parties involved have the option of settling, which happens when they come to an agreement outside of court. Settlements frequently offer benefits to both parties because they eliminate the uncertainty that is inherent in any court trial. The defendants get to save face by paying off the class members without the need to admit that they did anything wrong, and the plaintiffs get the certainty of a payout, which they might not get if the jury decides to rule in favor of the defendants.

Any class-wide settlement, though, must be approved by the judge presiding over the case. When considering whether to approve or reject a settlement, the judge takes into account the strength of the position of each party involved, as well as the potential damages at stake.

The very large class action lawsuit against Apple, Google, and Adobe has captivated the attention of employment attorneys and tech moguls all over the country. The lawsuit alleges that the three companies along with others were engaged in an illegal agreement not to hire each other’s employees. This allegedly kept the salaries of those employees artificially low and constituted an unfair business practice because the companies were able to save money by paying their employees less than they would have if they had known there was a possibility of those employees getting poached by a competing company. The agreement allegedly involved Apple, Google, Adobe, Lucasfilm, Intuit, and Pixar. The lawsuits against Lucasfilm, Intuit and Pixar have been successfully settled.

Apple, Google, and Adobe proposed to settle their lawsuit for $324 million. After the plaintiffs’ attorneys take their 25% cut, this would leave each of the 64,000 class members with only about $4,000. According to Judge Lucy H. Koh, of the Northern District of California, this is not enough to fall within the “range of reasonableness” for this case.

As Judge Koh pointed out, there is “ample evidence” that the Silicon Valley employers were involved in “an overarching conspiracy” against its employees. In her decision, Koh cited Steve Jobs of Apple as “a, if not the, central figure in the alleged conspiracy,” and the court documents tell a similar story.

For example, when Google, wanted to hire a group of Apple’s engineers in 2005, Jobs responded, “If you hire a single one of these people, that means war.” Eric Schmidt, Google’s chief executive at the time, testified that “Steve was unhappy, and Steve’s unhappiness absolutely influenced the change we made in recruiting practice.” At one point, Jobs allegedly got a Google recruiter fired for attempting to hire employees who were working for Apple.

The attorneys for the plaintiffs in the class action lawsuit have cited as much as $3 billion in damages, and if a jury were to award that amount, it would automatically be tripled. According to Orly Lobel, a professor of labor and employment law at the University of San Diego, in order to come up with a settlement to satisfy the judge, the parties will probably have to come up with “a settlement that is more in the billion-dollar ballpark.”The attorneys at Chicago Overtime Law Center have decades of experience litigating wage and hour cases, including overtime, vacation pay, meal breaks, and tips. We have offices conveniently located in Oakbrook Terrace and Chicago, Illinois. Contact a Skokie and Evanston wage and hour lawyer at the Chicago Overtime Law Center today at 312-869-4095. We are looking to represent service worker, and loan and mortgage brokers who have not been paid overtime and have been misclassified as managers.