SAN JOSE, California (Bloomberg) - Apple and Google won preliminary court approval of a US$415 million antitrust settlement that would end a four-year battle over claims that they and other companies conspired to avoid hiring from each other.
The ruling brings to a quiet end a case which since 2011 produced dozens of controversial internal e-mails detailing anticompetitive agreements among the companies - and drew the ire of U.S. District Judge Lucy Koh in San Jose, California, who derided and rejected an earlier US$324.5 million proposal to resolve the lawsuit as insufficient.
Koh didn't say a word at a hearing Monday about the US$90.5 million more the companies kicked in, or the US$23 million in fees plaintiffs lawyers decided to forgo to push through what they claim is the second-largest settlement of a group case on behalf of workers. Instead, she agreed to allow notices to be sent to approximately 64,000 technical employees covered by the settlement and set a July hearing for final approval of the deal. Under the agreement, the average payout for the workers will be US$5,077.72, according to a court filing.
For the companies, which include Adobe Systems and Intel, approval of the deal all but removes the threat of a jury trial that could have resulted in damages of more than US$9 billion in a case that the Koh said presented "ample evidence" of antitrust violations.
As the case lingered, it also sparked new lawsuits claiming other technology and entertainment companies engaged in the same anti-competitive conduct. Last year, complaints relying on evidence from the case before Koh were filed against DreamWorks Animation, Walt Disney, Sony units, Oracle, Microsoft and IAC/InterActiveCorp.
The Silicon Valley case, filed in 2011 and set for trial in April, mirrors claims the companies settled with the U.S. Justice Department in 2010. When Koh rejected the original accord in August, she said the settlement fund should be bigger in light of a US$20 million deal reached earlier with three other companies sued by employees - Intuit Inc. and Walt Disney's animation studio Pixar and visual-effects specialist Lucasfilm Ltd.
The US$81 million fees the plaintiff lawyers stand to collect in the case amount to 19.5 per cent of the US$415 million accord, which they say is well below a 25 per cent benchmark for such cases. They said only one class-action employment case in U.S. history got a better result, a sex-discrimination suit against the federal government that settled for US$508 million in 2000. That case was in court for 23 years.
Among the e-mails generated as evidence in the Silicon Valley case was one sent to Apple co-founder Steve Jobs in 2007 from Google Chairman Eric Schmidt, who said the company was terminating "within the hour" a recruiter who contacted an Apple employee in violation of the companies' "do not call policy."
"Apologies again on this and I'm including a portion of the e-mail I received from our head of recruiting," Schmidt, then chief executive officer of Google and an Apple board member, wrote to Jobs. "Should this ever happen again please let me know immediately and we will handle.
Thanks!! Eric." Jobs responded to the message with a smiling emoticon.