The proposed sum is too small to cover damages, the Judge believes
The Judge handling the case featuring Google, Adobe, Apple and Intel in which the execs of these companies entered a deal not to poach each other’s employees in order to control wages in Silicon Valley, has rejected the proposed deal.According to court documents, Judge Lucy Koh said that the $324 million (€241.6 million) settlement proposed by the four companies and to which the lawyer of the group including 64,000 workers agreed to is too low to properly compensate for the lost wages employees may have suffered.
The companies will now have to go back to the drawing board and come up with a different sum if they want to avoid going to trial, which is exactly what they want in order to avoid letting out information about the inner workings of their companies and the embarrassing details of the deals they made.
Workers for these companies claim that between 2005 and 2006, execs of Google, Apple, Intel and Adobe routinely discussed details of their deal to keep from hiring employees away from their jobs, which is an obvious anti-competitive practice.
There are plenty of emails going between Steve Jobs, Eric Schmidt and other execs, that have been pretty embarrassing for the companies and obviously damaged their image. If the case goes to trial more details are likely to emerge in the media, which is something all companies involved are trying to prevent.
However, proposing to pay a mere $324 million (€241.6 million) when the estimated damages are as high as $3 billion (€2.23 billion) is surely not going to cut it.
Judge Lucy Koh said that there is amble evidence of an overarching conspiracy between companies and she’s concerned that the settlement offers significantly less money to the employees who have not settled individually with the companies.
The judge estimated that the minimum amount these companies should have to pay is $380 million, based on the amount the companies paid out when settling previous complaints, but even this number is vastly under the estimated damages.
The case has been going on for a few years already and the companies are likely waiting for it to be over. If they finally come up with a proper proposal, they are likely to finally put this whole issue behind them once and for all.
The fact that the judge finally sent these tech giants back to the drawing board says a lot, especially since she’s been pondering on whether or not to accept the deal since late June.