It looks as if Silicon Valley’s dirty laundry may get aired after all.
In a forceful slap at both the industry’s casual attitude toward employment laws and risk-averse lawyers who decline to push strong cases to trial, a Silicon Valley judge on Friday took the highly unusual move of rejecting the settlement in a class action accusing tech companies of agreeing not to solicit one another’s employees.
Citing “ample evidence of an overarching conspiracy,” U.S. District Judge Lucy Koh in San Jose said a preliminary $324 million settlement did not fall “within the range of reasonableness.”
She also said the evidence against the defendants was compelling — saying, for example, that Steve Jobs, Apple’s late chief executive, was “a, if not the, central figure in the alleged conspiracy.”
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Koh estimated that the workers should receive at least $380 million. Attorneys representing the workers originally were seeking damages of $3 billion before settling for about 10 percent of that amount in a deal reached in April. If $3 billion in damages had been awarded in a trial, it could have been tripled to $9 billion under U.S. antitrust law.
The case will go to trial unless the parties cobble together another settlement that meets the judge’s approval.
While judges often fine-tune proposed class-action settlements, it is unusual for one to be entirely thrown out in favor of a trial.
“I cannot recall a judge saying in a class-action case that the amount of settlement is too low and you need to go back and go for broke at trial,” said Daniel Crane, who teaches antitrust law at the University of Michigan Law School. “This is very striking.”
Three of the defendants — Google, Apple and Intel — declined to comment. The fourth, Adobe, could not be reached for comment.
A lawyer for the plaintiffs, Dean Harvey of the firm Lieff Cabraser, did not respond to a message requesting comment.
One plaintiff, Michael Devine, a 46-year-old freelance programmer who previously worked for Adobe, had raised objections to the proposed settlement.
Google, Apple and the other companies had agreed in May to settle accusations that they had conspired to limit hiring among tens of thousands of engineers. After as much as $81 million for the lawyers, that would have left just a few thousand for each of the plaintiffs.