Apple, Google, Adobe and Intel now have to go back to the drawing board after a judge rejected their settlement of $324.5 million in an antipoaching case that has lasted three years.
The companies were accused by tech workers of conspiring to avoid poaching each other's employees, and the settlement would have involved each affected worker receiving between $2,000 and $8,000.
According to the judge, the settlement wasn't enough when compared with an earlier settlement reached with companies such as Pixar and Lucasfilm.
"The remaining defendants should, at a minimum, pay their fair share as compared to the settled defendants, who resolved their case with plaintiffs at a state of the litigation where defendants had much more leverage over plaintiffs," wrote U.S District Judge Lucy Koh.
The case was first filed back in 2011, alleging that a number of tech companies had agreed not to poach each others' employees, reducing competition, and allowing the companies to pay lower wages.
"It is rare that a court rejects a settlement in an antitrust case," said Mark Lemley, a professor at Standford Law School. "But here, the judge's reasoning makes sense -- the settlement was actually less favorable to the plaintiffs than the one they got with other companies back in 2011, even though the plaintiffs look poised to win the case. I suspect the parties will return with a modestly larger settlement soon."
A former Adobe employee, who was one of the head plaintiffs in the case representing 64,000 workers, urged the judge to reject the settlement.
The ruling comes one year after Intuit, Pixar and Lucasfilm had to pay a much larger settlement. Despite paying a larger settlement, employees from these three companies only represent 8 percent of the employees involved in the lawsuit.
Over the duration of the case Koh disclosed a 2006 email exchange, which referred to Google's plans to build an engineering center in Paris. During the project Google sought three Apple employees, however Steve Jobs, ex-CEO of Apple, objected, saying that he would "strongly prefer that you [Google] not hire these guys." Google then told Jobs that they had scrapped the plans for the center based on Jobs preference.
The judge also repeatedly pointed to the related settlement with Intuit and Pixar that took place last year, in which the companies involved paid proportionally a lot more than the amount proposed by Apple, Google and Adobe. To match this earlier settlement, the amount would need to total at least $380 million.
If the case continues to trial, plaintiffs could win as much as $3 billion, which could triple based on antitrust laws.