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You are here: MacNN Forums > News > Tech News > Follow-up: new anti-poaching lawsuit settlement offer $415 million

Follow-up: new anti-poaching lawsuit settlement offer $415 million
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Jan 15, 2015, 11:16 PM
 
More specifics have been revealed in the second proposed settlement offer from Apple, Google, Intel and Adobe in a lawsuit stemming from the companies' informal "no poaching" agreement. The new proposal has the four companies willing to pay a combined $415 million, up from the previous settlement's $324.5 million, to end the anti-trust lawsuit. US Federal District Court Judge Lucy Koh will need to approve the proposal before it can be finalized.



Although the companies appear to have at least initially only wanted to prevent aggressive recruiting of key employees among each other, the secret collusion was almost certainly illegal under California law, and plaintiffs said it had the effect of suppressing wage and job opportunities. The idea appears to have come from an initial agreement between Apple and Google, possibly started by former CEO Steve Jobs, who's email to Google's Eric Schmidt complaining about aggressive recruiting of Apple employees may have led to an informal arrangement.

The tech companies and the plaintiffs, who represented tens of thousands of tech workers who could have been affected by the agreement, had previously agreed to a settlement in the class-action case that would have seen the four companies paying out $324.5 million in damages, but that offer was rejected by presiding US District Court Judge Lucy Koh, who said the amount was too small and suggested a figure about $55 million higher.

The new offer is actually nearly $90 million higher, though a significant portion of the money would go to legal fees. When combined with earlier settlements by Pixar, Lucasfilm, and Intuit, the total would likely reach $435 million if approved. Assuming that legal fees take around a third of the amount, plaintiffs would likely be eligible for an award of perhaps $4,000 each -- estimated to be a fraction of the amount the plaintiffs claimed had been suppressed in potential wage increases and bonuses had the agreement among the Silicon Valley firms not been in force.

In addition to monetary damages, the companies have also agreed to a set of conditions that should prevent any similar agreements from happening. A similar lawsuit from the Department of Justice was settled by the companies in 2010 for an undisclosed amount.

     
mac_in_tosh
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Jan 16, 2015, 12:30 PM
 
"the secret collusion was almost certainly illegal under California law"...but if you have enough money you just buy your way out?
     
DiabloConQueso
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Jan 16, 2015, 12:45 PM
 
If by "buy your way out" you mean "pay a fine," then yes -- much in the same regard as "buying your way out" of a traffic ticket.
     
Charles Martin
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Jan 16, 2015, 08:30 PM
 
Yes, currently the price tag for "buying your way out" is $415 million.
Charles Martin
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mac_in_tosh
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Jan 16, 2015, 09:45 PM
 
"much in the same regard as "buying your way out" of a traffic ticket"...so you're comparing doing something that potentially could affect the livelihood of thousands of people to maybe failing to signal when making a turn?
     
DiabloConQueso
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Jan 17, 2015, 12:21 PM
 
Yep, I sure am. And the difference in the size of the fine clearly demonstrates the difference in the size of the infraction.

This isn't Minority Report. We don't prosecute based upon what could have happened, we prosecute based upon what actually happened. You don't get charged with murder for doing something that could have killed someone, you get charged with murder for doing something that actually killed someone.
     
mac_in_tosh
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Jan 17, 2015, 07:22 PM
 
So you think that this collusion didn't negatively impact a single person's ability to seek employment? Maybe there should be an investigation to determine exactly how many people were affected. Then we could "prosecute based on what actually happened."

Also, re. your comment about the size of the fine - was the fine paid by the people that did the wrongdoing, or was it paid by the corporation i.e. all of its shareholders? So the analogy is not perfect.
     
DiabloConQueso
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Jan 18, 2015, 02:47 PM
 
There is no perfect analogy so that's an impossibly high bar to meet. My point was to simply use the analogy to offer perspective.

We don't know if any singular individuals were negatively impacted. I would think that it would be difficult to even ascertain that, much less quantify it in order to place a dollar figure on it. On the surface, the collusion seems to insinuate that the companies simply had a secret "cease-fire" concerning hiring between companies -- i.e., poaching employees. So, the majority of people affected would seem to be extremely valuable employees (e.g., those with high salaries) -- not low-level employees that are easily replaceable. In other words, Mr. or Ms. X working for Apple for $Y in salary wouldn't be wooed away by Adobe for $Y + Z salary.

One probable reason for this is that when companies go from one high-level company to another, they inadvertently (or willingly) bring along intimate knowledge of parts of the company they're leaving -- so all the companies involved in this particular collusion have vested interests in keeping their secrets within the walls of their own company.

Yes, the fine was paid by the corporation itself, most likely. This is one of the unavoidable risks inherent in owning a part of a company (which usually ends up net-positive anyway, if you're not a shitty investor). Are you insinuating that being a shareholder in a company affords you all the benefits of when the company makes good decisions, but that the shareholder should be protected from any downturns in the company from bad decisions? That when someone in the company makes a good, profitable decision that every stockholder gets to share in the success, but when someone in the company makes a bad, unprofitable decision that the stockholders now get to single out individuals to carry 100% of that burden? That owning a part of a company should be a risk-free venture? No liquid assets will leave any shareholders' pockets, so I'm not sure how you get that the shareholders literally will be paying for this fine.
     
   
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