From Antitrust Law Daily, January 16, 2015

Apple, Google agree to pay $415M to settle employees’ claims over no-poach agreements

By Linda O’Brien, J.D., LL.M.

In a class action by former technical employees against major technology companies for allegedly engaging in a conspiracy to fix and suppress employee compensation, the remaining defendants—Apple Inc., Google, Adobe Systems, and Intel Corporation—are seeking preliminary approval of a beefed-up $415 million agreement to settle all individual and class claims, according to a court filing in the federal district court in San Jose, California (In re High-Tech Employee Antitrust Litigation, January 15, 2015). The new deal is $90.5 million more than a proposed settlement that the court rejected last year.

Software engineers and other technical workers who were former employees of several major technology companies filed a class action suit against Google, Apple, Adobe, and other companies, alleging that the companies engaged in a conspiracy to fix and suppress employee compensation and to restrict employee mobility through anti-solicitation agreements. The plaintiffs settled with defendants Pixar, Lucasfilm, and Intuit, and the final approval of the settlement was granted in May 2014. In August 2014, the court rejected a $324.5 million settlement proposed by Google, Apple, Adobe, and Intel as below the range of reasonableness, noting that class members would recover proportionally less than from the earlier settlement of $20 million with Pixar, Lucasfilm, and Intuit.

Under a proposed order, the defendants will pay a combined total of $415 million into a settlement fund, which will be distributed to each class member based on a formula using the class member’s base salary paid during the class period. Class counsel will be allowed to apply for an award of attorneys’ fees not to exceed $81 million and costs of no greater than $1.2 million. Class counsel is also allowed to seek service awards of $80,000 for each named plaintiff to be paid from the settlement fund.

According to the plaintiffs’ motion for preliminary approval, the proposed settlement is within the range of reasonableness. The settlement is a product of arm’s length, good faith negotiations and is fair, reasonable, and adequate to the class. Moreover, the agreement was reached by an experienced mediator and occurred after the completion of extensive fact and expert discovery. The total consideration is substantial in light of the risks of trial and any jury verdict would be subject to appellate review.

The plaintiffs further claimed that the settlement does not grant preferential treatment to class representatives, fairly compensates class members based on their salary and alleged injury, and provides the class with a timely and certain cash recovery.

Finally, the plaintiffs requested that the court schedule a hearing to determine whether the settlement should be finally approved.

Attorneys: Richard M. Heimann (Lieff Cabraser Heimann & Bernstein, LLP) and Joseph R. Saveri (Joseph R. Saveri (Joseph Saveri Law Firm, Inc.) for Siddharth Hariharan, Mark Fichtner, and Daniel Stover. Robert Addy Van Nest (Keker & Van Nest LLP) and Lee H. Rubin (Mayer Brown LLP) for Google Inc. David C. Kiernan (Jones Day) for Adobe Systems Inc. Michael F. Tuback (O'Melveny & Myers LLP) for Apple Inc. Gregory P. Sonte (Munger Tolles & Olson LLP) for Intel Corporation.

Companies: Google Inc.; Apple Inc.; Intel Corporation; Adobe Systems Inc.

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