Klein & Wilson

Settlement reached on large employee antitrust case

Despite earlier criticism from a U.S. District Court Judge in California, Apple Inc. and Google Inc. have reached a preliminary settlement in a suit about actions that violated antitrust laws. This $415 million settlement is reportedly the second largest settlement awarded to a group of workers.

One source reports that the judge presiding over this case cited that there was "ample evidence" that the companies conspired in order to avoid hiring the same employees, which might be construed as an antitrust violation, and the judge called an earlier settlement offer of $324.5 million insufficient. The $415 million settlement faces final approval in July, and around 64,000 technical employees would receive about $5,077 each from the settlement. If the case went to trial, it was suggested that the total damages could have been worth more than $9 billion.

The evidence in this case included several emails between the companies named in the suit, and one email showed correspondence between the Google Chairman and the co-founder of Apple. Chairman Eric Schmidt sent Steve Jobs a message saying that he was terminating a recruiter that had contacted an Apple employee.

This suit was filed in 2011 and also involved companies like Intel. Corp. and Adobe Systems Inc. Similarly, Pixar, Lucasfilm Ltd. and another company paid a $20 million settlement after employees sued for the noncompetitive practices of these companies.

While a trial could have led to a bigger payout, the plaintiffs and their attorneys in this case chose to take a settlement offer. Allegations of unfair business practices may be costly, and a trial can take a long time and be costly. An attorney may be able to assist a business in negotiating a settlement that is less costly to the venture. In addition, the attorney may attempt to find a solution that might lead to a claim being thrown out of court.

Source: Bloomberg Business, "Apple-Google $415 Million No-Poaching Accord Wins Approval", Joel Rosenblatt, March 2, 2015

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