Silicon Valley No-Poaching Settlement in Doubt

Throwing a proposed $324 million settlement with four Silicon Valley powers into doubt, a lead plaintiff in a lawsuit alleging illegal hiring practices in the tech industry has urged a federal judge to reject the pact, calling it "grossly inadequate."

In a letter sent this weekend to U.S. District Judge Lucy Koh, Michael Devine, one of several plaintiffs in the class action, argues that the deal with Apple, Google, Adobe and Intel should be nixed because it does not punish the companies sufficiently for entering into side agreements not to hire from each other.

"There's no justice for the class in that, nor is there any real deterrent to future wrongdoing," wrote Devine, who now lives and works in Seattle. "We want a chance at achieving real justice."

Lawyers for an estimated 64,000 tech employees reached the proposed settlement in April, calling for the four companies to pay the $324 million to resolve the case as it approached a trial at the end of this month. Lucasfilm, Pixar and Intuit previously settled for a total of $20 million.

Plaintiffs' lawyers were going to seek about $3 billion in damages if the case went to a jury, one of the reasons Devine now says the settlement should be rejected. "This settlement," he told Koh, "... will amount to less than one percent of the compensation for each class member over the duration of the illegal agreements."

Koh is expected to hold a hearing on the proposed settlement later in May.

The lawsuit alleged top executives for the companies, including late Apple CEO Steve Jobs and Google CEO Eric Schmidt, cut deals not to poach from rival work forces between 2005 and 2009. Evidence in the case revealed emails discussing the alleged agreements, which the employees argued stifled hiring in the valley and suppressed pay and benefits for...

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