Apple, Google, Intel and Adobe Offer $415M Settlement Over Claims of Worker Pay Cartel

Monica Cantilero Monday, January 19, 2015

A customer is silhouetted while entering the Fifth Avenue Apple store shortly after doors opened for iPhone 6 sales in Manhattan, New York, in this Sept. 19, 2014 file photo. | REUTERS/Adrees Latif

Silicon Valley giants Apple Inc., Google Inc., Intel Corp., and Adobe Systems Inc. have agreed to pay $415 million in an attempt to resolve a class-action suit alleging that they created an illegal cartel to keep their workers from taking better-paying jobs from other companies.

The settlement proposal was a revision filed on Thursday in a federal court in San Jose, California, after the previous $324.5-million amount offered was rejected by U.S. District Judge Lucy Koh as insufficient five months ago, ABC News reported.

Koh believed that at least $380 million, including lawyer fees, should be paid to around 64,000 workers involved in the case.

The lawsuit filed in 2011 originally sought $3 billion in damages, which could have been tripled under the U.S. antitrust law. The workers' attorneys decided to opt for settlement as the alleged conspiracy was deemed difficult to prove to a jury.

If the district judge green-lights the revised settlement, the four tech firms will be able to avert a trial over allegations that they secretly agreed not to recruit each other's employees from 2005 to 2009.

The alleged scam was halted after the U.S. Justice Department started an investigation which was rounded off with an antitrust complaint against the four companies. The case was settled without admission of guilt or payment of fines by the involved firms.

Some of the evidence gathered in the lawsuit are emails of Apple's and Google's top officials. Steve Jobs, the late chief executive officer of Apple, was said to be the leader of the cartel which sought to lessen chances that top computer programmers and other star employees will transfer to other tech firms. Wages of the employees, who were already earning over $100,000 yearly, were suppressed.

Internal emails also showed that former Google CEO Eric Schmidt, who was on Apple's board at the time when the alleged collusion started, fired a Google recruiter for contacting an Apple engineer.