Judge says settlement is too low in Silicon Valley hiring case

A California judge has rejected the proposed settlement in a lawsuit over no-hire agreements among top Silicon Valley companies, saying the amount being offered to compensate workers is too low.

The remaining defendants in the case -- Apple, Google, Intel and Adobe Systems -- had reached a deal with the worker's lawyers to settle the case for US$324.5 million, but Judge Lucy Koh of the federal district court in San Jose, California, said that amount is too low.

After subtracting the fees for the workers' lawyers -- they're allowed to keep up to a quarter of the award, or $81 million, as well as other money -- each worker would be left with an average of only $3,750.

"The Court finds the total settlement amount falls below the range of reasonableness," Koh wrote in her order, issued Friday.

She said she was troubled that the workers would get less money than under a previous settlement with companies that settled earlier in the case, even though the case has been progressing in the workers' favor since then.

Last year, Intuit, Lucasfilm and Pixar settled with the workers before the case came to trial.

All of the companies were accused of striking secret deals to not poach each others' workers, a violation of the Sherman Antitrust Act that reduced the workers' potential to earn higher wages.

An expert hired for the case has estimated that the workers' should receive damages of $3 billion, for wages they could have earned if the no-hire agreements hadn't been in place.

James Niccolai covers data centers and general technology news for IDG News Service. Follow James on Twitter at @jniccolai. James's e-mail address is james_niccolai@idg.com