Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Final approval sought for $415M settlement in high-tech employee class action, (Jun 16, 2015)

By Linda O’Brien, J.D., LL.M.

In a class action by former technical employees against major technology companies for allegedly engaging in a conspiracy to fix and suppress employee compensation, the plaintiffs and remaining defendants, Apple Inc., Google, Adobe Systems, and Intel Corporation are seeking final approval of $415 million agreement to settle all individual and class claims, according to a motion for final approval of class action settlement filed in the federal district court in San Jose, California (In re High-Tech Employee Antitrust Litigation, June 15, 2015).

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, and the final approval of the settlement was 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 and noting 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, which was preliminarily approved in March 2015.

According to the plaintiffs’ motion for final approval, the defendants will pay a combined total of $415 million into an all cash settlement fund, which will be distributed to each class member based on a formula using the class member’s base salary paid during the class period. Class counsel will be allowed to apply for an award of attorneys’ fees, not to exceed $81 million, and costs of no greater than $1.2 million. Class counsel is also allowed to seek service awards of $160,000 for each of the five named plaintiffs to be paid from the settlement fund.

The settlement is fair, reasonable, and adequate and final approval of the settlement is appropriate. The settlement is a product of extensive arm’s length negotiations conducted by capable counsel and follows years of hard fought litigation and thorough investigation. The consideration is substantial in light of the risk of continued litigation and the settlement plan of allocation provides a neutral way to compensate class members. Further, litigation through trial would be complex and costly, which the settlement avoids.

Moreover, the recommendation of experienced counsel favoring the settlement should be given significant weight and the low rates of objections and opt-outs indicate approval of the class. None of the objections have raised meritorious concerns, the motion states.

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.

News: Antitrust CaliforniaNews