A US Judge has smited an attempt by Apple, Intel, Adobe and Google to settle their wage-fixing case with former employees.
Judge Lucy Koh ruled Friday that the $324.5m settlement deal the firms had negotiated with the plaintiffs' attorneys does not adequately compensate their ex-workers. The former employees claimed that the four moneybags giants were among a cabal of Silicon Valley companies that agreed not to recruit techies in an effort to cut staff turnover and halt rising salaries.
In the order [PDF], Judge Koh said the deal would be considerably lower than the plaintiffs deserve based on the evidence presented. She said at least $145.5m should be added to the proposed figure, which is after all chump change for Apple et al.
"The court is concerned that class members recover less on a proportional basis from the instant settlement with remaining defendants than from the settlement with the settled defendants a year ago, despite the fact that the case has progressed consistently in the class's favor since then," Judge Koh wrote.
"Counsel's sole explanation for this reduced figure is that there are weaknesses in plaintiffs' case such that the class faces a substantial risk of non-recovery. However, that risk existed and was even greater when plaintiffs settled with the settled defendants a year ago, when class certification had been denied."
The settlement Judge Koh refers to was the 2013 $20m partial settlement [PDF] struck by Intuit, Lucasfilm and Pixar for their parts in the scandal. According to Judge Koh, that deal should be the basis for any settlement struck by the remaining four firms.
"If remaining defendants were to settle at the same (or higher) rate as the settled defendants, remaining defendants' settlement fund would need to total at least $380 million," she said.
"This number results from the fact that remaining defendants paid out 95 per cent of the class compensation during the class period, while settled defendants paid only 5 per cent of the class compensation during the class period."
Rejection of the settlement means that the four titans will have to go back to the drawing board and put forward a better proposal – even though the plaintiffs' attorneys had agreed to the settlement offer.
Now, it appears we will have to wait a bit longer to see how Apple and the Chocolate Factory will manage to sweeten the deal for their ex workers. ®