Judge Rejects Wide-Reaching Tech Industry Wage Suppression Settlement ‘Cause It’s Not Big Enough

The Silicon Valley wage theft anti-trust lawsuit known as “Techtopus” will not be allowed to end with a whimper (or that sound the fax machine used to make). The judge overseeing the trial has struck down a $324 million settlement on the grounds that…wait for it…it’s not enough.  

U.S. District Judge Lucy Koch states that, given the nature of the case and the likely millions of workers it effects, the case cannot end with a settlement lower than what should be expected if it were to go to trial.  From her order:

“This Court has lived with this case for nearly three years, and during that time, the Court has reviewed a significant number of documents in adjudicating not only the substantive motions, but also the voluminous sealing requests. Having done so, the Court cannot conclude that the instant settlement falls within the range of reasonableness. As this Court stated in its summary judgment order, there is ample evidence of an overarching conspiracy between the seven Defendants…”

The Techtopus wage theft conspiracy will now be completely revealed in the trial setting. The members of the class action lawsuit claim that seven tech giants, including Apple and Google, reached an illegal agreement to suppress the wages of tens of thousands of tech employees.  Pando writer Mark Ames reports how deeply the tentacles of the “Techtopus” were entrenched in the industry:

Confidential internal Google and Apple memos, buried within piles of court dockets and reviewed by PandoDaily, clearly show that what began as a secret cartel agreement between Apple’s Steve Jobs and Google’s Eric Schmidt to illegally fix the labor market for hi-tech workers, expanded within a few years to include companies ranging from Dell, IBM, eBay and Microsoft, to Comcast, Clear Channel, Dreamworks, and London-based public relations behemoth WPP. All told, the combined workforces of the companies involved totals well over a million employees.

Judge Koch also cites the strength of the plaintiffs’ case and uses an earlier settlement with Intuit, LucasFilm, and Pixar to argue for a more appropriate sum (on the order of $380 million).  She also rejects the plaintiffs’ argument that winning a large antitrust wage theft case would be difficult in court:

“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.

Using the Settled Defendants’ settlements as a yardstick, the appropriate benchmark settlement for the Remaining Defendants would be at least $380 million, more than $50 million greater than what the instant settlement provides.”

Among the more interesting findings in the order is Judge Koch’s view of former Apple and Pixar CEO Steve Jobs, whom she refers to as “a, if not the, central figure in the alleged conspiracy.” Big names abound:

“Plaintiffs are correct that there are particularly clear statements from Lucasfilm and Pixar executives regarding the nature and goals of the alleged conspiracy. Specifically, Edward Catmull (Pixar President) conceded in his deposition that anti- solicitation agreements were in place because solicitation ‘messes up the pay structure.’ Similarly, George Lucas (former Lucasfilm Chairman of the Board and CEO) stated, ‘we cannot get into a bidding war with other companies because we don’t have the margins for that sort of thing.’

“However, there is equally compelling evidence that comes from the documents of the Remaining Defendants. This is particularly true for Google and Apple, the executives of which extensively discussed and enforced the anti-solicitation agreements. Specifically, as discussed in extensive detail in this Court’s previous orders, Steve Jobs (Co-Founder, Former Chairman, and Former CEO of Apple, Former CEO of Pixar), Eric Schmidt (Google Executive Chairman, Member of the Board of Directors, and former CEO), and Bill Campbell (Chairman of Intuit Board of Directors, Co-Lead Director of Apple, and advisor to Google) were key players in creating and enforcing the anti-solicitation agreements.”

Read the entire Pando piece HERE.

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