Judge rejects $324 million tech hiring settlement

August 8, 2014, 9:19 PM UTC
Photo by Andrew Unangst—Getty Images

A federal judge in California has rejected a $324.5 million settlement in an antitrust case targeting the hiring practices at tech giants Apple, Google, Intel and Adobe Systems.

U.S. District Judge Lucy Koh ruled Friday that the “total settlement falls below the range of reasonableness” in a three-year old class action brought by a group of tech workers who alleged that the group of companies had colluded to bring down Silicon Valley salaries by agreeing to not poach each other’s workers.

The two sides agreed to settle the case in April after the companies produced emails showing executives at various companies discussing no-hire deals with their counterparts at other companies. But they denied claims that they conspired to keep down wages.

However, Koh said in her order Friday that the four companies must add more than $50 million to their settlement proposal – at least $380 million – in order to make it fair to all class members.

Google and Apple declined to comment.

Three other companies – Walt Disney’s (DIS) Pixar and Lucasfilm units and Intuit (INTU) – had also been named as defendants in the suit, but previously reached a separate settlement. Disney agreed to pay roughly $9 million while Intuit paid $11 million.

Koh wrote that she based her decision on the value of that earlier settlement, while taking into account the fact that the remaining defendants – Apple (AAPL), Google (GOOG), Adobe (ADBE)and Intel (INTC) – employed far more class members than the companies whose settlement was already approved.

The judge also seemed to feel that the group led by Apple and Google might be getting off easy, writing that “there is ample evidence of an overarching conspiracy.” Had the case gone to trial, the companies could have faced more than $9 billion in damages along with a mountain of bad publicity, she said. While Koh acknowledged that a trial also could have exposed holes in the class members’ case, she reached the conclusion that the companies “should, at a minimum, pay their fair share.”