Tech Industry

Apple, Google appeal settlement rejection in wage-fixing case

After a district court judge rejected a $324.5 million settlement in August, the tech firms are hoping the Ninth Circuit will intervene.

The companies said Judge Lucy Koh committed "clear legal error" in her rejection of the settlement. Shara Tibken/CNET

Four Silicon Valley companies are appealing the rejection of a $324.5 million proposed settlement in a case where tech workers have accused the firms of colluding to fix wages, according to a court document.

In a petition filed late Thursday night, Apple, Google, Intel and Adobe asked the United States Ninth Circuit Court of Appeals to weigh in on the ruling. Judge Lucy Koh, of the Northern District of California in San Jose, in August rejected the settlement sum for being too low.

The companies' petition to the appeals court is just the latest from the high-profile case. In the lawsuit filed in 2011, tech workers accused the companies of entering into no-poaching agreements in an attempt to keep salaries for the workers artificially low. Earlier this week, both sides said they had resumed mediation talks.

Apple, Google and Adobe declined to comment. Intel only pointed to the petition, and declined to further comment. An attorney for the tech workers did not immediately respond to a request for comment.

The companies wrote that Koh "committed clear legal error" in her method of deeming the amount too low. In her ruling, Koh said that she's "concerned that class members recover less on a proportional basis" from the settlement with the four remaining defendants than from the settlement reached last year with the other three initial defendants -- Lucasfilm, Pixar and Intuit. She said newest settlement "would need to total at least $380 million."

On Thursday, the companies argued that Koh created an "unprecedented and rigid test for preliminary settlement approval in class actions." They also defended their proposed sum, saying it was the highest settlement ever in an employment antitrust case.

The tech firms also said the district court "[suggested] that, unless the settlement was larger, the court had -- in its own words -- 'wasted years on this case.'"

The wage-fixing directives allegedly came from the top, with the lawsuit basing much of the case on emails from Steve Jobs, Apple's late co-founder, and Eric Schmidt, Google's chairman, discussing the agreement. Koh previously said in a ruling that they were among the "key players in creating and enforcing the anti-solicitation agreements."

The companies said in April that they had reached a deal with the workers as a way of avoiding a drawn-out legal battle. Had the plaintiffs won in court, they could have received damages of more than $9 billion. Instead, Koh said the proposed settlement should have been higher because the plaintiffs had made such a strong case against the companies.

Reuters earlier reported the news.