(Adds settlement amount)
By Dan Levine
SAN FRANCISCO, April 24 Four major tech
companies including Apple and Google have agreed to pay a total
of $324 million to settle a lawsuit accusing them of conspiring
to hold down salaries in Silicon Valley, sources familiar with
the deal said, just weeks before a high profile trial had been
scheduled to begin.
The settlement was disclosed in a court filing earlier on
Thursday, which did not spell out terms.
Tech workers filed a class action lawsuit against Apple Inc
, Google Inc, Intel Inc and Adobe
Systems Inc in 2011, alleging they conspired to refrain
from soliciting one another's employees in order to avert a
Trial had been scheduled to begin at the end of May on
behalf of roughly 64,000 workers. Had the case gone to trial,
plaintiffs would have asked a jury to award roughly $3 billion
in damages, according to court filings. Under antitrust law,
that could have then been tripled to $9 billion.
The case has been closely watched due to the potentially
high damages award and a steady disclosure of emails in which
Apple's late co-founder Steve Jobs, former Google CEO Eric
Schmidt and some of their Silicon Valley rivals hatched plans to
avoid poaching each other's prized engineers.
In one email exchange after a Google recruiter solicited an
Apple employee, Schmidt told Jobs that the recruiter would be
fired, court documents show. Jobs then forwarded Schmidt's note
to a top Apple human resources executive with a smiley face.
Another exchange shows Google's human resources director
asking Schmidt about sharing its no-cold call agreements with
competitors. Schmidt, now the company's executive chairman,
"Schmidt responded that he preferred it be shared 'verbally,
since I don't want to create a paper trail over which we can be
sued later?'" he said, according to a court filing. The HR
The companies had acknowledged entering into some no-hire
agreements but disputed the allegation that they had conspired
to drive down wages.
Spokespeople for Apple, Google and Intel declined to comment
on the settlement, and an Adobe representative was not
immediately available for comment. An attorney for the
plaintiffs, Kelly Dermody of Lieff Cabraser Heimann & Bernstein,
in a statement called the deal "an excellent resolution."
Corporate defendants in antitrust cases often agree among
themselves what portion each will contribute towards a
settlement, said Daniel Crane, a professor at the University of
Michigan Law School. One likely formula would be to divide the
damages based on how many employees each company has in the
class, he said.
Apple, Google, Adobe and Intel in 2010 settled a U.S.
Department of Justice probe by agreeing not to enter into such
no-hire deals in the future. The four companies had since been
fighting the civil antitrust class action.
Walt Disney Co's Pixar and Lucasfilm units and
Intuit Inc had already agreed to a settlement, with
Disney paying about $9 million and Intuit paying $11 million.
Any settlement must be approved by U.S. District Judge Lucy
Koh in San Jose, California. A hearing on final approval of the
Intuit and Disney deals is scheduled for next week.
The plaintiffs and the companies will disclose principal
terms of the settlement by May 27, according to the court filing
on Thursday, though it is unclear whether that will spell out
what each company will pay.
Some Silicon Valley companies refused to enter into no-hire
agreements. Facebook Chief Operating Officer Sheryl Sandberg,
for instance, rebuffed an entreaty from Google in 2008 that they
refrain from poaching each other's employees.
Additionally, Apple's Jobs threatened Palm with a patent
lawsuit if Palm didn't agree to stop soliciting Apple employees.
However, then Palm Chief Executive Edward Colligan told Jobs
that the plan was "likely illegal," and that Palm was not
"intimidated" by the threat.
The case in U.S. District Court, Northern District of
California is In Re: High-Tech Employee Antitrust Litigation,
(Reporting by Dan Levine, editing by Peter Henderson)