Silicon Valley's attempt to settle with 64,000 tech workers after the companies were accused of participating in antipoaching agreements with each other has been rejected by a federal judge. The ruling states that Judge Lucy Koh believes the $324.5 million deal "falls below the range of reasonableness."
If the settlement had gone through, each worker would have received just over $5,000, which Koh believes would not have been appropriate given the circumstances. Apple, Google, Intel and Adobe were attempting to avoid extending the case further with the settlement.
But Koh rejected the move. She believes there is a major "conspiracy" in Silicon Valley over hiring practices. She indicated it could possibly go to trial if a higher settlment of at least $380 million isn't negotiated. The higher amount would be more in keeping with the amounts awarded plaintiffs on May 16, 2014, when the court granted final approval to $20 million in settlements reached in 2013 in a case involving Intuit, Lucasfilm and Pixar.
"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," said Koh. "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 case, which also includes the likes of Lucasfilm and Pixar, among others, has shed light on the hiring practices in Silicon Valley and how many companies appear to be dealing with one another to avoid competition over salaries and wages.
It appears that the decision could have been brought on by a letter from plaintiff Michael Devine, who told the judge the settlement would allow the tech companies to get off too easy, and said they had initially demanded over $3 billion in damages.
The employees have been arguing that the companies' executive management conspired against workers over salaries, benefits and the ability to freely seek employment at another company. The case had leveled accusations over top executives dealings with each other vis-à-vis workers and their rights.
Many have viewed the case as a potential watershed moment where, if the workers are successful in their litigation, it would give them renewed power in an industry quickly becoming dominated by CEOs and other executive officials.
There will likely be another round of talks between the plaintiffs' lawyers and the companies, who most likely do not want to see the case end without a deal so it doesn't go to a lengthy trial.