Apple, Google offer $415 million to settle antipoaching suit

That's $90.5 million more than the previous settlement offer in the case accusing four Silicon Valley giants of conspiring not to hire away each other's employees.

Defendants in an employee antipoaching lawsuit have offered a $415 million settlement. Shara Tibken/CNET

Four Silicon Valley companies -- including Apple and Google -- have agreed to pay $415 million to settle an antitrust lawsuit that accused the companies of conspiring not to hire away each other's employees.

The proposed settlement, which also includes Intel and Adobe Systems, was revealed in a motion filed by the companies Thursday in US District Court in San Jose, Calif. The settlement offer -- the second presented in the case -- is $90.5 million more than a previous offer that was rejected by a federal judge.

In the motion, which still requires court approval, the defendants continued to deny that they had engaged in any wrongdoing or violated any law.

"We deny the allegations contained in the suit and we deny that we violated any laws or that we have any obligation to the plaintiff," Intel spokesman Chuck Mulloy said in an emailed statement. "We elected to settle the matter in order to avoid the risk, burdens and uncertainty of ongoing litigation."

Apple and Google declined to comment, while Adobe did not respond to a request for comment.

The lawsuit, filed in 2011 by former employees, accused the Silicon Valley giants of carrying out an "interconnected web" of agreements to keep wages low by not hiring each other's workers between 2005 and 2009. The lawsuit has garnered much attention for the intimate look it has provided into the inner workings and apparent cooperation among some of the Valley's biggest companies.

After three other companies settled in 2013, the four remaining companies tried to avoid a potentially costly and drawn-out trial last May by agreeing to pay $324.5 million to the plaintiffs in a settlement offer. That offer was rejected in August by US District Court Judge Lucy Koh as being too low. She wrote that she was concerned that plaintiffs would receive less on a proportional basis than employees covered by a settlement reached a year earlier with Lucasfilm, Pixar and Intuit -- the other three initial defendants in the case.

Those three companies paid a combined $20 million, covering 8 percent of the employees named in the suit. If the remaining defendants reached a settlement at the same or higher rate as the settled defendants, the amount should total at least $380 million, she said.

Some of the evidence in the case focused on emails sent between executives at the named companies that allegedly detail the conspiracy.

An unredacted court filing in January 2012 recounted an e-mail exchange between late Apple co-founder and CEO Steve Jobs and then-Google CEO and Apple board member Eric Schmidt, in which Jobs politely asks Schmidt to stop trying to hire one of Apple's engineers.

"I would be very pleased if your recruiting department would stop doing this," Jobs wrote to Schmidt on March 7, 2007.

According to the exchange detailed in the filing, Schmidt then sent the request on, saying: "I believe we have a policy of no recruiting from Apple and this is a direct inbound request. Can you get this stopped and let me know why this is happening? I will need to send a response back to Apple quickly so please let me know as soon as you can."

The case began in 2011 when a former Lucasfilm software engineer filed a lawsuit alleging that the seven companies conspired to keep wages low by refraining from poaching one another's employees. Several similar complaints followed and they were all consolidated into a class action lawsuit that covered nearly 65,000 employees who worked for the companies between 2005 and 2010.

The suit focuses specifically on the companies targeted by a 2009 antitrust investigation by the US Department of Justice. That investigation and the civil lawsuit that followed were settled in September 2011, with the aforementioned companies agreeing to discontinue the non-solicitation agreements. Nonetheless, the suit says the companies are still profiting in the aftermath of the practice.

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