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Judge rejects Apple and Google wage-fixing settlement, suggests $380M as minimum

A federal judge issued a surprise ruling on Friday in a closely-watched court case over an illegal pact by big tech companies — Apple(s aapl), Google(s goog), Intel and Adobe — to suppress worker wages.

In her ruling, U.S. District Judge Lucy Koh complained that a proposed $324.5 million settlement was too low in light of an earlier deal in which Pixar, LucasFilm and Intuit paid to settle similar allegations last year.

Koh wrote that on the basis of that earlier settlement (which offered $20 million to a much smaller pool of workers, who amounted to 5 percent of total defendants), the new settlement should be at least $380 million:

One way to think about this is to set up the simple equation: 5/95 = $20,000,000/x. This equation asks the question of how much 95% would be if 5% were $20,000,000. Solving for x would result in $380,000,000.

Koh also noted repeatedly that she was “disturbed” because the new proposed settlement offered workers a lower amount even though they were in a stronger legal position based on recent court rulings.

“[The] procedural posture of the case swung dramatically in Plaintiffs’ favor after the initial settlements were reached,” Koh wrote.

As a result of the settlement, which provides up to 25 percent for the workers’ lawyers, the parties will have to either propose a new figure, or else take their chances at trial.

The news of the initial settlement was leaked to the media in April, leading one of the engineers who was a lead plaintiff in the original case to object to the deal.

Steve Jobs as “central figure in the alleged conspiracy”

This week’s ruling also offers details of a sweeping conspiracy in which the big tech companies entered secret pacts to refrain from recruiting each other’s employees.

Those details are sometimes colorful, as Koh quoted communications from leading tech names, including Apple’s late CEO Steve Jobs (who she describes as “a, if not the, central figure in the alleged conspiracy”) as well Google’s Sergey Brin and Silicon Valley coach Bill Campbell.

“Steve just called me again and is pissed that we are still recruiting his browser guy,” Campbell told Brin and Google’s Larry Page.

The ruling also shows how Google’s participation in the scheme was driven in part by a desire to stop Facebook(s fb), which denied to participate in the conspiracy, from hiring its employees.

Here’s the ruling with some key parts underlined:

Koh Rejects No-poach Settlement

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8 Responses to “Judge rejects Apple and Google wage-fixing settlement, suggests $380M as minimum”

  1. Kayce Basques

    “In her ruling, U.S. District Judge Lucy Koh complained that a proposed $324.5 million settlement was too low in light of an earlier deal in which Pixar, LucasFilm and Intuit paid to settle similar allegations last year.”

    “Complained” isn’t the right word here. She’s an impartial federal judge. “Ruled” is more respectful to her position.

      • Thanks for kind words, Kayce.. (Re “complained,” yes I suppose “ruled” would be more appropriate within the legal community — in this case, though I thought it was accurate enough for a plain English explanation)

        • A plain English explanation having a bias against Koh and disrespect for her position as a federal judge, yes.

          Roberts, if you start cleaning up your writing away from these biases and report facts, I’ll begin to respect your writing.

        • Chelsea Wu

          How much do you wanna bet that he would put “ruled” if the judge was a man?

          I’ve noticed when a female judges something, it’s a “complaint” but when a male judges something, it’s a “decision” or “ruling.” Implicit sexism.

          • Thanks for your comment, Chelsea, but I respectfully disagree. While unconscious biases can always arise, in this case, I don’t think my choice of verb reflects gender.

            My general view of the law is that judges — men or women — are not impartial arbiters, but are people with a worldview that is often reflected in their writing. Koh’s opinion here reflected not just “the law” but her view of how the lawyers and companies had handled the situation. It was a complaint or, if you prefer, an objection.

            Finally, I know such things are no assurance against bias, but I clerked for an outstanding female judge whose decision-making skills I respected enormously.