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Judge could bin $325m wage-fixing settlement in Silicon Valley

Lucy Koh says she's 'concerned' about whether the deal is fair to tech workers

Internet Security Threat Report 2014

A US judge is reportedly worried about the settlement for tech workers in the no-hire pact lawsuit in Silicon Valley.

Judge Lucy Koh has to approve the $324m payout from Apple, Google, Intel and Adobe, after employees sued the four firms along with Pixar, Lucasfilm and Intuit over an alleged conspiracy to keep wages down by refusing to poach each other’s staff.

Koh has already approved separate settlements from Disney’s movie units and Intuit for around $20m in total, but she said she wasn’t sure that the four tech giants offer was good enough.

“I just have concerns about whether this is really fair to the class," Koh said in court on Thursday.

The suing workers were hoping to ask for around $3bn in damages if the case had gone to trial and because the issue comes under antitrust law, that could have ended up tripled to $9bn.

One of the four named plaintiffs, Michael Devine, filed an objection to the settlement after it was proposed, saying it was “grossly inadequate”. He claimed that he wasn’t properly consulted about the deal, and he asked the court to reject it as “unfair and unjust”.

“The tentative settlement, if it stands, amounts to big profits for plaintiffs’ counsel, insulation from real liability for the defendants and locks in a significant net loss for the class,” he said.

However, the plaintiffs’ attorney Kelly Dermody said yesterday that the case faced serious risks if it went all the way through the trial and on to appeal, because the US Supreme Court hasn’t been kind to class-action suits lately.

"Those are very, very real risks for plaintiffs," she said, adding that the settlement was already the largest antitrust employee deal ever reached "by far”.

But Koh said she wasn’t so sure that the Supreme Court would get involved in this particular case.

“If there was going to be good case for further restricting class actions, I'm not sure this is the one," she said.

However, she also said that the settlement would at least give all workers the chance to get money, even if they didn’t file a paper claim. Each tech employee stands to get a few thousand dollars on average in the proposed deal.

Google’s legal eagle Robert Van Nest also argued that Apple and the other tech firms face paying out way more than Disney and Intuit did, and said that Devine’s objections were “baloney”.

Koh has yet to decide if she’ll accept the settlement. ®

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