SAN FRANCISCO —A federal judge has decided a $324.5 million settlement isn’t enough to cover the damages done to more than 60,000 high-tech workers in a class-action lawsuit alleging that Google and Apple conspired with other technology companies to block their top employees from getting better job offers.
The ruling Friday by U.S. District Judge Lucy Koh rejected a settlement reached in April, prolonging a three-year-old case that paints a mean-spirited picture of late Apple founder Steve Jobs and other prominent Silicon Valley executives.
Koh estimated that the workers deserve at least $380 million, based on the evidence indicating their earning power was undermined by the collusion among their employers. The judge scheduled a hearing in the case for Sept. 10.
Attorneys representing the workers originally sought $3 billion in damages before settling for about 10 percent of that amount. If $3 billion in damages had been awarded in a trial, it could have been tripled to $9 billion under U.S. antitrust law.
A $9 billion award would have paid the affected workers an average of more than $140,000. Koh estimated that after subtracting lawyers’ fees and other payments, the workers would have received an average of $3,750 had she approved the $324.5 million settlement. That amount “falls below the range of reasonableness,” she wrote.
The settlement would have been paid by Apple, Google, Intel and Adobe Systems. The lawsuit alleges that they and three other companies — Intuit, Pixar Animation and Lucasfilm — secretly agreed not to recruit one another’s workers at various junctures from 2005 through 2009.
Apple and Google declined to comment on Koh’s ruling. Intel spokesman Chuck Mulloy said the company was disappointed by the decision, but hadn’t yet decided its next step. Adobe didn’t immediately respond to requests for comment. Kelly Dermody, a San Francisco attorney for the workers, also didn’t immediately respond to requests for comment.
A $20 million settlement of the claims against Intuit, Pixar Animation and Lucasfilm was approved in June.
Koh indicated that the workers at Google, Apple, Intel and Adobe had built a strong case against their employers. “There is ample evidence of an overarching conspiracy,” she concluded in her 32-page ruling.
In their arguments for approving the $324.5 million settlement, attorneys for the workers argued the conspiracy wouldn’t have been easy to prove to a jury. The degree of difficulty raised the risk of the employees receiving little or nothing if the case were to go to trial, the lawyers said. If the settlement had been approved, the workers’ attorneys’ would have received $82 million in fees and expenses.
To illustrate why she believes the workers have a strong case, Koh referred to depositions and e-mails detailing some of the machinations that led to the no-poaching agreements. She depicted Jobs, who died in October 2011 after prolonged battle with cancer, as the ringleader of the scheme. He “was a, if not the, central figure in the alleged conspiracy,” Koh wrote. The ruling also chastised Google and Adobe for following Jobs’s wishes “out of fear and deference to him.”
Koh pointed to evidence showing that Google scrapped plans for an engineering center in Paris staffed by former Apple employees after Jobs strenuously objected. In another instance cited by Koh, Google’s then-chief executive Eric Schmidt fired a recruiter who had contacted an Apple engineer in 2007, raising Jobs’s ire. When Schmidt e-mailed the news that the recruiter had been fired, Jobs forwarded the note to Apple’s personnel department with a smiley face above it, Koh noted.
The Justice Department opened an investigation into Silicon Valley’s no-poaching pacts in 2009, resulting in a 2010 settlement requiring the participating companies to stop the practice. The companies didn’t acknowledge any wrongdoing.