Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Cal.: $415M settlement in high-tech employee class action gets preliminary nod, (Mar 4, 2015)

By Linda O’Brien, J.D., LL.M.

The federal district court in San Jose, California has given preliminary approval to a proposed $415 million settlement with remaining defendants Apple Inc., Google, Adobe Systems, and Intel Corporation in a class action brought by former technical employees against major technology companies for engaging in a conspiracy to fix and suppress employee compensation (In re High-Tech Employee Antitrust Litigation, March 3, 2015, Koh, L.).

Software engineers and other technical workers who were former employees of several major technology companies filed a class action suit against Google, Apple, Adobe, and other companies, alleging that they engaged in a conspiracy to fix and suppress employee compensation and to restrict employee mobility through anti-solicitation agreements among the companies. The plaintiffs settled with defendants Pixar, Lucasfilm, and Intuit, with the final approval of the settlement granted in May 2014. In August 2014, the court rejected a $324.5 million settlement proposed by Google, Apple, Adobe, and Intel as below the range of reasonableness. The court observed that class members would recover proportionally less than from the earlier settlement of $20 million with Pixar, Lucasfilm, and Intuit. In January 2015, the defendants proposed a beefed-up $415 million agreement to settle all individual and class claims.

Reasonableness of the settlement. In granting the preliminary approval of the proposed settlement, the court found that it fell within the range of reasonableness. The court noted that the settlement appeared to be the result of arm’s length negotiations among experienced counsel. The consideration—a total of $415 million —was substantial, particularly in light of the risk that the jury could find no liability or award no damages. Furthermore, the settlement’s allocation plan provided a neutral and fair way to compensate class members based on their salary and continued litigation would be complex and costly.

Settlement class. For purposes of the settlement, the court preliminarily certified a class of natural persons who work in the technical, creative, and/or research and development fields that were employed on a salaried basis by one or more of the following: Apple, Google, Intuit, Lucasfilm, or Pixar during the class period. The plaintiffs satisfied the requirements of Federal Rule of Civil Procedure 23(a) and 23(b).

Additionally, the court approved the notice of proposed settlement and found that the notice procedures were the best practicable means of providing notice of the settlement agreement under the circumstances.

Class counsel was directed to file their respective motions for payment of attorneys’ fees by May 7. Class members will have until May 21 to opt out of the class. A hearing on the final approval of the settlement was set for July 9, at which time the court will consider the fairness, reasonableness, and adequacy of the settlement and whether final approval of the settlement shall be granted.

The case is No. 11-CV-02509-LHK.

Attorneys: Richard M. Heimann (Lieff Cabraser Heimann & Bernstein, LLP) and Joseph R. Saveri (Joseph R. Saveri (Joseph Saveri Law Firm, Inc.) for Siddharth Hariharan, Mark Fichtner, and Daniel Stover. Robert Addy Van Nest (Keker & Van Nest LLP) and Lee H. Rubin (Mayer Brown LLP) for Google Inc. David C. Kiernan (Jones Day) for Adobe Systems Inc. Michael F. Tuback (O'Melveny & Myers LLP) for Apple Inc. Gregory P. Sonte (Munger Tolles & Olson LLP) for Intel Corporation.

Companies: Google Inc.; Apple Inc.; Intel Corporation; Adobe Systems Inc.

Cases: Antitrust CaliforniaNews