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

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A federal judge issued a surprise ruling on Friday in a closely-watched court case over an illegal pact by big tech companies — Apple, Google, 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, 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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