October 4, 2013

Software Engineers Seek Court Approval Of $20 Million Antitrust Settlement With High-Tech Giants

Plaintiffs seeking to represent a class of software engineers employed by Silicon Valley giants are asking the U.S. District Court for the Northern District of California to certify a settlement class and to approve a $20 million settlement of antitrust claims reached with Intuit Inc., The Walt Disney Co.’s Pixar Animation Studios Inc., and Lucasfilm Ltd.

If the settlement in In re: High-Tech Employee Antitrust Litigation is approved, Intuit would pay $11 million, and Lucasfilm and Pixar would pay a combined $9 million.  The three settling defendants would also cooperate with plaintiffs in continuing the litigation against Apple Inc., Google Inc., Intel Corp., Adobe Systems Inc. and other non-settling defendants, who are alleged to have conspired not to compete for each other’s software engineers and effectively fixing their salaries.

Plaintiffs filed their suit in May 2011, following an investigation by the U.S. Department of Justice that concluded that Silicon Valley businesses had entered into “facially uncompetitive” agreements not to compete for one another’s engineers.

The plaintiffs accuse the high-tech companies of agreeing to alert one another when one made an offer to another’s employee, to limit packages for prospective employees to prevent bidding wars, and to refrain from recruiting each other’s personnel.  These agreements allegedly caused the engineers to be paid between 10 and 15 percent less than they would have been in a competitive market.

The scope of the proposed class is still being litigated.  The court denied plaintiffs’ initial motion for certification of a class of all salaried employees of the defendants, expressing skepticism that plaintiffs would “be able to show that Defendants maintained such rigid compensation structures that a suppression of wages to some employees would have affected all or nearly all Class members.”  The court, however, gave plaintiffs leave to file a supplemental motion for class certification.

In May 2013, the plaintiffs sought certification of a more limited class of technical employees, claiming that this group of workers was targeted by the anti-poaching agreements and fixing of salaries.  In opposing certification of this more narrow class, the defendants argued that plaintiffs still could not prove that the alleged agreements among the seven Silicon Valley companies affected more than 60,000 employees with thousands of different job titles.

The court has yet to rule on this latest motion for class certification, which was the subject of a hearing in August.

Categories: Antitrust Litigation

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