Judge not sold on $324M settlement in Silicon Valley tech worker case

A proposed US$324.5 million settlement of claims that Silicon Valley companies including Google and Apple suppressed worker wages by agreeing not to hire each others’ employees may not be high enough, a judge signaled on Thursday.

Judge Lucy Koh said in court that she was worried about whether that amount was fair to the roughly 64,000 technology workers represented in the case. “I have concerns over whether it’s sufficient,” she said, speaking at the U.S. District Court in San Jose, California.

Koh didn’t say whether she would approve the settlement. Throughout the course of Thursday’s hearing, she questioned not just the amount but the logic behind the settlement as presented by lawyers for both the plaintiffs and the defendants.

Google, Apple, Adobe and Intel agreed to a settlement in April of charges that executives at those companies had entered into secret agreements not to hire or “poach” employees from each other, in order to protect their investments. Plaintiffs, many of whom are engineers, argued those agreements restricted their mobility and drove down wages.

A big chunk of the evidence in the case relies on emails sent between high-profile executives, including the late Apple CEO Steve Jobs and Google co-founder Sergey Brin.

“If you hire a single one of these people, that means war,” Jobs told Brin at one point, according to a court filing.

Judge Koh, and some attorneys familiar with the case, said exchanges like that were strong evidence against the accused companies.

But attorneys for the plaintiffs said on Thursday they had doubts about whether jurors would see those emails as convincing evidence, citing studies they had done.

Koh was dubious. “I think [jurors] would have found these documents very significant and compelling,” she said, referring to both the emails and other evidence, such as oral agreements and confidential compensation information that allegedly was shared between the companies.

Previously named defendants Intuit, Lucasfilm and Pixar have already settled in the case, for about $20 million.

Robert Van Nest, an attorney for Google, said Thursday that roughly 8 percent of the plaintiffs were represented in that earlier settlement. At that rate of compensation, the proposed settlement for the remaining companies would be lower than $324.5 million, he said.

“This number is right in the sweet spot of what is not only fair, but a premium over that settlement,” he said.

But Koh questioned whether it makes sense to compare the previously named defendants to Adobe, Apple, Google and Intel.

It’s unclear what the judge will decide, or when. The next hearing in the case is set for November.

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