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Court rejects $324.5 million settlement in tech talent recruiting antitrust case

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A settlement offer to tech worker plaintiffs proposed by Adobe, Apple, Google, and Intel for $324.5 million has been rejected by the Court. On Friday the U.S. District Court in San Jose, California said that the proposed settlement was too low considering the strength of evidence against the defendants in the class action antitrust case targeting tech companies. The companies are accused of conspiring to prevent each other from recruiting tech workers from each other, in essence hampering competition and preventing the workers from getting just compensation based on their skills.

Judge Koh, who wrote the opinion, stated that there is “substantial and compelling” evidence that Apple co-founder Steve Jobs played a central role in the conspiracy and provided supporting details from the evidence for the parties so they would understand the court's position. One example of this is an email exchange in which Jobs and Eric Schmidt of Google discussed the recruitment of an Apple employee by a Google recruiter. The messages ended with Schmidt telling Jobs the recruiter would be fired as an example to the rest of the recruiting staff, and Jobs forwarding this response to Apple HR executives with a smiley face emoticon. Koh's opinion also mentioned the fact that Google did not open a Paris engineering center with three former Apple employees after Jobs and Apple objected.

Adobe, Apple, Google, and the Plaintiffs have not commented on the decision, but Intel expressed disappointment tempered with gratitude for the court's clarification. The settlement was the result of months of negotiation between the parties. Not all plaintiff workers agreed with the settlement, but many plaintiffs felt that going forward would be risky, especially at the appeals stage. The plaintiffs have asked for approximately $3 billion in damages, and antitrust laws may triple that amount after trial.

The next hearing in the case, In Re: High-Tech Employee Antitrust Litigation, U.S. District Court, Northern District of California 11-cv-2509, is on September 10.

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