Judge appears poised to approve Apple, Google anti-poaching settlement

Judge Lucy Koh in August rejected the companies' initial $324.5 million offer to settle the case accusing four Silicon Valley giants of conspiring to stay away from each other's employees.

Shara Tibken Former managing editor
Shara Tibken was a managing editor at CNET News, overseeing a team covering tech policy, EU tech, mobile and the digital divide. She previously covered mobile as a senior reporter at CNET and also wrote for Dow Jones Newswires and The Wall Street Journal. Shara is a native Midwesterner who still prefers "pop" over "soda."
Richard Nieva Former senior reporter
Richard Nieva was a senior reporter for CNET News, focusing on Google and Yahoo. He previously worked for PandoDaily and Fortune Magazine, and his writing has appeared in The New York Times, on CNNMoney.com and on CJR.org.
Shara Tibken
Richard Nieva
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Federal judge Lucy Koh approved a $415 million settlement by Apple, Google, Adobe and Intel related to illegal agreements not to poach each other's employees. Shara Tibken/CNET

A federal judge appears ready to approve a $415 million deal by four Silicon Valley tech giants to settle an antitrust lawsuit that accused them of conspiring to not recruit each other's employees.

During a hearing on Monday, Judge Lucy Koh seemed to support the settlement proposed by Adobe Systems, Apple, Google and Intel, though she scheduled a final approval hearing in July, according to the San Jose Mercury News. Koh in August had rejected the companies' $324.5 million settlement offer, saying the employees harmed by the no-poaching policy deserved more.

The new proposed settlement was revealed in a motion filed by the companies January in US District Court in San Jose, Calif.

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

Filed by former employees in 2011, the lawsuit accused the current four defendants along with Intuit, Lucasfilm and Pixar Animation Studios of carrying out an "interconnected web" of agreements between 2005 and 2009 to not hire each other's workers so they could keep wages low. The lawsuit grabbed the world's attention because it revealed the inner workings and apparent cooperation among some of area's biggest companies.

Intuit, Pixar and Lucasfilm settled in 2013. Last year, the four remaining companies made their own settlement offer, which Judge Koh rejected as too low. She wrote she was concerned that plaintiffs would receive proportionally less than employees covered by the settlements reached the year earlier with Lucasfilm, Pixar and Intuit. 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 forwarded 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, when the seven companies agreed to halt their non-solicitation agreements. Nonetheless, the suit says the companies are still profiting in the aftermath of the practice.

CNET's Steven Musil contributed to this report.