Result: $435 million settlement
Latest Developments in the High-Tech Antitrust Class Action Case
On September 2, 2015, the Court approved a $415 million settlement with Apple, Inc., Google, Inc., Intel Corporation, and Adobe Systems, Inc. The combined settlements in this landmark litigation constitute the largest resolution in history of antitrust claims in the employment setting, on either an aggregate or per-class-member basis.
The Court’s settlement approval order became final on October 5, 2015. The Court-appointed settlement administrator (Gilardi & Co., LLC) is preparing to allocate and distribute the settlement to the over 64,000 members of the Class. The settlement administrator is conducting final calculations and audits and expects to distribute the settlement to class members by the end of December 2015. The settlement administrator originally announced that it would complete this process by the end of November 2015 and apologizes for the delay on its end. It is making every effort to distribute the funds to class members as quickly and accurately as possible.
Earlier, on May 16, 2014, the Court granted final approval to settlements valued at $20 million that had been reached in 2013 with Intuit Inc., Lucasfilm Ltd., and Pixar.
Class Certification and Class Definition
On October 24, 2013, U.S. District Court Judge Lucy H. Koh granted plaintiffs’ motion for certification in a class action charging that Adobe, Apple, Google, Intel, and other large tech companies conspired from approximately 2005 to 2009 to suppress the pay of technical, creative, and other salaried employees, including by agreeing not to actively recruit each other’s employees.
By certifying the case as a class action, the individual plaintiffs that filed the lawsuit can represent all class members in claims that Adobe, Apple, Google, Intel, and the other tech company defendants violated federal antitrust laws.
The Court certified the following class of approximately 64,600 persons, known as the Technical Class:
The job titles of persons in the Technical Class include: (1) Software Engineers, (2) Hardware Engineers and Component Designers, (3) Application Developers, (4) Programmers, (5) Product Developers, (6) User Interface or User Experience Designers, (7) Quality Analysts, (8) Research and Development, (9) Animators, Digital Artists, Creative Directors and Technical Editors, (10) Graphic Designers and Graphic Artists, (11) Web Developers, (12) IT Professionals, (13) Systems Engineers and Administrators, and (14) employees classified as technical professionals by their employers.
Partial Settlements Reached
In July 2013, Lucasfilm and Pixar together agreed to pay $9 million, and Intuit agreed to pay $11 million, to settle the respective claims against their companies. Approximately 8% of the class worked for one of these three companies.
On May 16, 2014, the Court approved the settlements with LucasFilm, Pixar, and Intuit.
Background: Importance of Competition for High Tech Employees
Competition in the labor market results in better salaries, enhanced career opportunities for employees, and better products for consumers. Silicon Valley firms and other high-tech companies owe their tremendous successes to the sacrifices and hard work of their employees, and must take responsibility for their misconduct.One of the principal means by which high-tech companies recruit employees is to solicit them directly from other companies in a process referred to as “cold calling.”
Factual Allegations: No Cold Calling, No Recruiting, and Limitations on Salary Offers
The consolidated complaint seeks lost compensation and treble damages for the alleged anti-competitive employment practices of Adobe, Apple, Google, Intel Corporation, Intuit, Lucasfilm, and Pixar. The complaint alleges the defendants conspired and formed agreements to (1) not recruit each other’s employees; (2) provide notification when making an offer to another’s employee (without the knowledge or consent of that employee); and (3) cap pay packages offered to prospective employees at the initial offer.
Starting with Lucasfilm and Pixar, and continuing until at least 2009 with all defendants, the companies entered into no solicitation, no cold-calling, no hiring, no poaching, and other anticompetitive agreements, with the intent to reduce employee compensation and mobility. As additional companies joined the alleged conspiracy, competition among participating companies for labor decreased. Compensation of defendants’ employees was less than what would have been paid in a properly functioning labor market where employers compete for workers.
The class action followed an investigation by the U.S. Department of Justice. After that investigation was made public, defendants agreed to end the anticompetitive agreements. However, no compensation was provided to employees of defendants. The class action seeks lost pay for the employees who were targeted by defendants’ alleged conspiracy.
Earlier Case Procedural History
On May 4, 2011, a former software engineer at Lucasfilm filed a class action lawsuit charging Adobe Systems Inc., Apple Inc., Google Inc., Intel Corporation, Intuit Inc., Lucasfilm Ltd., and Pixar with violations of antitrust laws by conspiring to fix and restrict the pay of their employees and entering into “no solicitation” agreements with each other. Similar complaints were later filed by other employees, and the cases were consolidated before federal Judge Lucy H. Koh under the caption In re High-Tech Employee Antitrust Litigation, Case No. 11-CV-2509-LHK. In 2012, Judge Koh denied in substantial part the defendants’ joint motion to dismiss the case.
On October 24, 2013, as summarized above, the Court granted plaintiffs’ motion to certify the Class. On October 25, 2013, the San Jose Mercury News published an in-depth article on Judge Koh’s order. In the article, Lieff Cabraser attorney Kelly Dermody noted that the order sends an important message “that people need to pay more attention to employee rights and fairness in the workplace.” Other media outlets that reported on the Court’s order included Bloomberg/Businessweek, the San Francisco Chronicle, CNET, and the Verge.
Contact Lieff Cabraser
Current and former employees of Adobe, Apple, Google, Intel, and other high-tech companies who wish to learn more about this lawsuit or to report their experiences may contact us online by using the form below. Or you may contact a Lieff Cabraser attorney at (415) 956-1000. All information will be kept strictly confidential as provided under law.
We will review your case without charge or obligation. Lieff Cabraser agrees to protect your name and all confidential information you submit against disclosure, publication or unauthorized use to the full extent under the law.