A U.S. judge on Thursday said she had concerns about approving a $324.5 million settlement involving Apple, Google and two other tech companies in a lawsuit accusing them of conspiring to avoid poaching each other's workers.
Tech employees filed a class action lawsuit against Apple Inc AAPL.O, Google Inc GOOGL.O, Intel Inc INTC.O and Adobe Systems Inc ADBE.O in 2011. The case has been closely watched due to the potentially high damages award and the opportunity to peek into the world of Silicon Valley's elite.
The four companies agreed to settle with the plaintiffs in April for a total of $324.5 million. The plaintiffs had planned to ask for about $3 billion in damages at trial, which could have tripled to $9 billion under antitrust law.
U.S. District Judge Lucy Koh in San Jose, California must approve the deal. At a court hearing on Thursday, Koh said the plaintiffs had leverage going into trial against the defendants, given the strength of the evidence in the case.
Several emails showed Apple's late co-founder Steve Jobs, former Google CEO Eric Schmidt and some of their Silicon Valley rivals hatching plans to enforce their no-poaching agreement.
"I just have concerns about whether this is really fair to the class," Koh said, adding that she had not made a decision about whether to approve the deal.
Plaintiff attorney Kelly Dermody said the workers faced serious risks on appeal had the case gone forward, especially since the U.S. Supreme Court has been skeptical of large class action lawsuits.
"Those are very, very real risks for plaintiffs," Dermody said, adding that the settlement was the largest antitrust employee deal ever reached "by far."
Koh was skeptical the Supreme Court would get involved.
"If there was going to be good case for further restricting class actions, I'm not sure this is the one," she said.
However, Koh also praised the settlement for allowing all the plaintiffs to recover money, regardless of whether they filed a paper claim. Workers would receive a few thousand dollars each on average.
Koh has previously approved separate settlements totaling $20 million reached by Walt Disney Co's DIS.N Lucasfilm and Pixar units, and by Intuit Inc INTU.O.
One of the four named plaintiffs, Michael Devine, filed an objection saying the settlement let the latest wave of companies off too easily. Daniel Girard, an attorney for Devine, suggested that Koh send both sides back to the negotiating table in the hopes of obtaining a larger amount.
However, Google attorney Robert Van Nest said Apple, Google, Intel and Adobe are paying a higher premium to settle the case than Disney and Intuit did, as calculated by the number of employees from each company in the class.
"You have Mr. Devine say, 'Well it should have been a little bit more?' Baloney," Van Nest said.
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