Qualcomm settles with former employees
The company says it has reached an agreement to settle a class-action suit filed by former employees after it sold parts of its infrastructure division to rival Ericsson.
Under the terms of the settlement, $8.9 million will be divided among more than 1,000 former Qualcomm employees covered by the lawsuit. Qualcomm said that while it agreed to resolve the lawsuit, it paid nothing toward the settlement, with all payments being made by third parties.
The class-action lawsuit was first filed last May by a former employee after Qualcomm sold its terrestrial wireless infrastructure to Ericsson. The suit was on behalf of former employees who were offered employment with Ericsson after the sale.
The suit, filed in California Superior Court in San Diego, alleged that Qualcomm had breached the terms of its stock option plan. The complaint sought to accelerate all unvested stock options for the members of the class action.
Although Ericsson stock did take off in the latter part of last year, climbing from about $31 in September to nearly $66 by December, its rise comes nowhere near the jolt Qualcomm shares sustained. Qualcomm stock rose from about $25 in April to about $175 in December, including a 2-for-1 split and a 4-for-1 split.
Qualcomm and Ericsson had offered the employees who had to move between the companies a retention bonus plan. The plan provided several benefits, including cash compensation, based on a portion of the value of the employees' unvested options, Qualcomm said in its annual report filed last November.
The former employees who filed the lawsuit have until April 17 to reject the settlement, Qualcomm said. The company added that if more than a designated number of plaintiffs opt out, it has the option to cancel the entire settlement.
A final settlement approval hearing has been scheduled for April 28.