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Earlier this year tech giants Apple, Google, Intel and Adobe were hit with a class action lawsuit. Recently, they have agreed to a settlement, to the tune of $415 million, to be paid jointly by all four companies. This puts the cost of the settlement about a hundred million more than Intel’s recent diversity initiative.

The antitrust suit was initiated by 64,000 programmers and engineers, who were employed by the four companies, alleging that they had secret agreements to enact anti-competitive practices. From a period of 2005 to 2009, the companies allegedly agreed not to poach each other’s employees. The plaintiffs claim that this cost them mobility and higher paying jobs.

Previously, the four tech companies tried to settle for the amount of $324 million, while still denying any wrongdoing. Lawyers representing the plaintiffs seemed to be in agreement. However one of the employees who was part of the class action suit, Michael Devine, argued that the amount was too low. He cited the fact that it fell far short of the estimated $3 billion in lost compensation that the plaintiffs deserved.

After hearing this argument, and in an unusual move, the judge overseeing the case rejected the settlement for being too low. This new settlement of $415 million has been accepted by the plaintiff’s lawyers, but we will have to wait and see if the judge again rejects the settlement as inadequate, or lets it stand.

Apple, Google, Intel and Adobe, are collectively worth hundreds of billions of dollars, so a few hundreds of millions is a fairly small amount, and it may be worth paying this cost to settle quickly. All four companies have tried to cultivate an image as progressive and worker friendly. A long drawn out court case, where they are shown to conspire against the best interest of their employees would damage this reputation.

Another serious concern is that going to court could result in losing a far greater sum of money if the jury rules against them. A jury could potentially award the plaintiffs billions of dollars. It might be in their best interest to settle for hundreds of millions rather than risk losing billions.

Do you think the settlement offered by Apple, Google, Intel and Adobe is fair to the plaintiffs? Do you think the judge will reject it again for being too low? How do you think this case affects the reputation of the four companies? Leave your comments below.

Max Michael

Senior Writer

I’m a technology reporter located near the Innovation District of Kitchener-Waterloo, Ontario.

  • It shouldn’t be surprising that they’d put their prerogative as a business above the welfare of their employees, but I’m always hopeful they’ll follow the example of the CEO who runs Costco.

  • Audie Bakerson

    That’s less than 7000 each, likely less than 6 or 5000 with lawyer cuts and even less after taxes

  • Couldn’t find the specific part I remember but here:

    “Costco has a reputation for paying its employees above market rate, with the typical worker earning around $45,000 in 2011, according to Fortune. Walmart-owned Sam’s Club, in contrast, pays its sales associates an average of $17,486 per year, according to salary information website

    Costco also provides health insurance to a significantly larger percentage of its workers than does Walmart, the Harvard Business Review reported in 2006.”

  • Bearpants112

    Their progressive politics ended at the reality of the bottom line. These tech companies have been operating without any ethical guidelines or even awareness of anti-trust law since their creation.

  • Adam Higerd

    I lean towards accepting their apologies. It’s been over five years since the alleged impropriety occurred (implying that the problem has been resolved for current employees), and it’s definitely true that actually fighting it isn’t going to end well at all — it’s a catch-22: if they fight and win, then they’ll be seen as anti-employee for using their legal might to deny people money they feel they deserve; if they fight and lose, then they’ll not only be paying out an amount of money that very well may cross into the territory of “this is actually painful, and potentially unfair to current employees” AND they’ll have to deal with the PR blowback of being associated with anti-employee actions.

    (Full disclosure: I’m a Google employee hired in 2014. I wasn’t affected by the original claims, and I have no idea what effect the outcome of this settlement / court battle will have on me, if anything. I feel certain that I’d still feel this way if I didn’t work for Google.)

  • Megamatics

    It isn’t a surprise at all when this happens to tech companies, since they’re one of the most viciously competitive industries around. They see employees as nothing more than pawns to be used until they can’t keep up. The way they fire you is even more detestable ; but I wont get into that. Stealing Employees, Price Fixing, and Monopolies are ways in which they conduct business casually. The PR Department is basically a fusion of the Legal and Marketing division, in that every move is made to keep them out of a lawsuit.

  • 64,000 programmers and engineers complaining that these practices would stop them from getting better and/or higher-paying jobs? Really? They couldn’t have just gotten together and start their own company? That’s sixty-four thousand people, far more than enough for their own tech company, yet they’d rather sue tech giants who uses practices however voluntary, all because of some supposed moral/ethical code.

    That deserves neither sympathy nor empathy from me. I can think of dozens of ways they could’ve stopped such practices without ever using such violent measures.

  • 1. They were informed enough to build a lawsuit.

    2. They got together well enough for a lawsuit.

    3. Anti-trust laws are nothing more than the forcing of someone’s moral and ethical codes or whatever other term you want to come up with to describe someone thinking it’s ‘wrong’. It is rather silly to pretend otherwise as there is no objective basis for such laws.

    4. All government activity is inherently violent since it comes with it the threat of violence for the remotely-disobedient, and cases based on a government regulation are no less violent.

    5. Creating and building their own company, Networking, Moving, Blogging, Documenting, Filming, Public Relations….