back to article Judge could bin $325m wage-fixing settlement in Silicon Valley

A US judge is reportedly worried about the settlement for tech workers in the no-hire pact lawsuit in Silicon Valley. Judge Lucy Koh has to approve the $324m payout from Apple, Google, Intel and Adobe, after employees sued the four firms along with Pixar, Lucasfilm and Intuit over an alleged conspiracy to keep wages down by …

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  1. Anonymous Coward
    Anonymous Coward

    Thumbs up.

    As someone who lots tens of thousands of dollars on a similar agreement between Semiconductor companies I am really hoping these workers are able to stick it to the tech giants.

    AC because I am still in the Industry.

  2. Peter Galbavy

    Lawyers get all the money and that's wrong?

    So, the judge is concerned that the majority of the $300m+ will go to the class action lawyers and not the members of the class action? That's a first - that anyone cared.

  3. Dan Paul

    Add another 3 Zero's!!!!!!!

    Simply put - ifd the idea is to prevent this kind of action in the future, 324 Million is not enough of a fine to even get the attention of any of these companies.

    Only 324 Billion x 3 would be enough. Collusion, price fixing, wage, age and likely sex discrimination should bring THAT kind of fine.

    1. Mephistro
      Thumb Up

      Re: Add another 3 Zero's!!!!!!!

      If the fine+compensation these companies have to pay is smaller than the money they 'saved' by acting illegally, they still have a big incentive to do it again. This 'agreement' is an insult to justice.

      And any fine should also include the harm done to American IT workers as a whole, because the consequences of this collusion by the biggest IT employers in the USA indirectly affects every IT worker.

      1. eclairz

        Re: Add another 3 Zero's!!!!!!!

        I've never thought it was a good deal, and now that I know most of the money will go to the attorneys, it makes it even worse. I don't think they should even settle, even for another few zeroes as this needs to be put into the public eye and they will obviously lose.

        Meaning the lawyers were probably in collusion with the companies, and the only way to stop this happening in the near future, is to follow it to the end. If the companies win(e.g. either win or get less money than settlement), then at least they know where they stand with the companies and will create their own start ups instead of waiting for promotion or change companies.

    2. Don Jefe

      Re: Add another 3 Zero's!!!!!!!

      You can't fine away this sort of behavior. Poaching agreements exist in every industry, between all but the smallest participants and regularly between even the fiercest of competitors. That's never going to change.

      Whatever the ultimate financial value if the judgement turns out to be, the companies at fault are being punished for formalizing the arrangement, not the arrangement itself.

      In what I find outrageously funny, the companies involved in this are all, (in)famously, known for their judicious application of interpretive contract semantics to box their customers, partners and employees into incredibly unbalanced scenarios where any and all actions you might take will cause you to inflict damage on yourself and simultaneously benefit the contract author.

      Therefore, I find it suitably appropriate that the most visible part the 'Digital Economy', the obsession with contracts, is what got these companies in trouble. Petards, hoisting and all that.

      1. Gene Cash Silver badge

        Re: Add another 3 Zero's!!!!!!!

        Yes, you can fine away this sort of behavior. It just has to be a real fine (i.e. not $20 bucks and a "don't do that again") and after a couple times, they'll stop.

        That's why these people are throwing a fit over the small fine.

        1. Don Jefe

          Re: Add another 3 Zero's!!!!!!!

          No, you can't fine away this sort of behavior. You can fine away the method in which undesirable behavior is carried out, but not the behavior itself. The goal/result doesn't change, simply the path to the goal.

          In this instance the only thing that is going to be different is what I said above, they won't formalize the agreement. The agreement will still be there, just like it was before they formalized it, and just like it has been since the day after the suit was filed.

          Fines are a pain in the ass, not a gun to anyone's head. Hell, once the fine gets big enough you can use it as an excuse to shitcan the pain in the ass employees you want to fire, but can't find a reason for doing so that won't end in a lawsuit.

          So you just carry on with cheerleading for more fines and harsher punishments. You sound like a politician, completely oblivious to the way the world works, so there's a career path for you. You should give it a shot. You can't be any worse than what we've already got.

          1. asdf
            Thumb Down

            Re: Add another 3 Zero's!!!!!!!

            >You sound like a politician, completely oblivious to the way the world works

            And you sound like one of those aholes that preaches about how pure and beautiful the free market is and then look the other way to bail outs and collusion. As long as the its the little guy getting screwed who cares eh? The system is always right.

          2. asdf

            Re: Add another 3 Zero's!!!!!!!

            >the only thing that is going to be different is what I said above, they won't formalize the agreement. The agreement will still be there

            Or perhaps require auditors to the big boys to look for the kind of irregularities that will show up with such shenanigans such as with non managerial wages/salaries trends compared to broader industry etc (with proper NDAs etc to defend the proprietary info). Yeah its obviously nearly impossible to keep the conversations at the country club fully above board but at least make more difficult for those that are trying to undermine the market and even our way of life from the inside.

            1. Don Jefe

              Re: Add another 3 Zero's!!!!!!!

              What the fuck do broader industry wages have to do with what someone gets paid? Those employees don't work for the industry, they work for a company. I pay based on the value of each individual, I'll pay 13 different salaries to 13 people doing the same job. The ability to simply show up for work doesn't entitle anyone to more money, no matter how long they've been keeping Herman Miller in business by crushing the life out of office chairs as their ass grows ever fatter.

              Instead of singing my praises (just keep talking, people like you have kept me in the spotlight for decades, so thanks for the free marketing) why don't you go back and read what I wrote. I in no way condoned, nor agreed with, any of this. I said fines won't do anything to alter corporate behavior beyond what was already being done before some idiot drew up a contract formalizing it all.

    3. Anonymous Coward
      Anonymous Coward

      @Dan Paul

      So you really think these plaintiffs deserve tens or hundreds of millions of dollars each, so they never have to work again, because these companies did them wrong and caused them damages of maybe few hundred thousand at most? And the lawyers deserve $324 billion dollars? (at the normal 33%)

      If lawsuits result in fines of more than actual damages, they need a mechanism where the excess "punitive" damages must be given to the government, or charity, or something, and not end up in the pockets of the plaintiffs or their lawyers. People shouldn't be able to win the lottery from a lawsuit, without even having to pay a dollar for the ticket!

      1. Trevor_Pott Gold badge

        Re: @Dan Paul

        "People shouldn't be able to win the lottery from a lawsuit, without even having to pay a dollar for the ticket!"

        Why not? Won't they "trickle down" that wealth? Or is that a comforting lie that only applies to existing wealthy people, and not to those who might become nouveau rich?

        Those people were screwed over by the companies in question. The existing settlement will leave the companies in question with a net gain for having broken the law and screwed thousands of workers in a fashion that quite honestly could have cartel-class implications.

        The companies involved deserve to have their metaphorical gonads crushed for this. They should be strung up and left for the buzzards as an example to future companies. Shareholders beware! Reign in the excesses of your board or your ill gotten gains will evaporate!

        But of course, I don't expect that you would see it that way...

        1. Don Jefe

          Re: @Trevor

          It's the shareholders that protect the executives and the company, what part of that do you not understand? It's the shareholders who will demand massive staff reductions to offset huge fines. It's the shareholders who will demand repackaging writedowns to absorb the fines. It's the shareholders who will demand ever more exotic tax structures and reductions in employee benefits.

          You seem to think there's no one between executives and regulators and that's just dangerously incorrect. There are tens of thousands of employees, the enormous funds managing millions of 401k's and IRA's, huge swaths of the NPO world and municipalities who actively support hyper aggressive corporate behavior.

          Do you not understand that's who pays fines? The company never pays the fines. You pay the fines. Your neighbors and the town you live in pay the fines. It won't be shareholders lamenting the behavior of corporate entities, it'll be shareholders driving those entities to be more aggressive and it'll be everybody but the company that pays.

          I've never understood why people think fines modify behavior. Sure, that works fine for 10 year old kids and maybe people that don't have much money, but there's a threshold past which fines become effectively meaningless to the people being fined. Not because they've got so much money, but because they won't be paying the fines with their own money and they know where to get more money. Nobody likes to pay fines, or having to recover funds spent paying fines, it does suck. But you're projecting the financial challenges the average person deals with onto a situation where those challenges don't exist. It's like I tell my interns and people coming to us for investment, if money is your biggest business problem then you're fucked already and probably not a good candidate for investment. You're not going to fine anyone more than they can recover, and they're going to add fees and interest to that too, just so you remember the costs of being a pain in the ass.

          All that being said, earlier I simply stated you can't fine away this sort of behavior, and that's true. But I didn't say I condoned it. I don't think general staff or operational management should be subject to any sort of agreement that could limit their career opportunities. What these companies did was too much and they should be fined and give the people who may have been negatively impacted some money. Hell, give them the equivalent to their lifetime salary, it doesn't matter. But you go and force fines beyond that, it still doesn't matter, you're the one who will pay those fines and it'll be the shareholders who ensure that's what occurs. Unless I've seriously misjudged you, I don't think getting lots of people fired, and their jobs sent to India is your goal, so perhaps you should consider reformulating your plans for 'corporate justice'.

      2. Tom 13

        Re: @Dan Paul

        I think the 33% is before it goes to trial. After it goes to trial I think the figure goes up to 50%. I don't recall all the exact details, just that it was one of the reasons my Dad settled at a lower rate for a truly open and shut* injury case that was covered by insurance. Going to court risked the whole settlement, delayed payment, and wouldn't have netted him a lot more money because of the increased fees.

        *Injury was a vehicle accident (18 wheeler ran a red light and nailed him in his bread truck) which almost cost him his leg. He was lucky. About three cars behind him was a surgeon who had just finished training in a new technique for reconstructing the leg. He took charge at the crash site and ordered the ambulance to his hospital. If the paramedics had taken him to their normal drop off, they would have amputated the leg.

  4. Anonymous Coward
    Anonymous Coward

    is Lucy Koh the only judge in California?

    1. Eddy Ito

      FFS Yes! Now go away.

      Actually no, there are five who work out of San Jose. The others are Davila, Jensen, Freeman and Whyte. Note that Judge Freeman only joined the group this year. Now notice the dates of those stories and the seniority of the Judge in question.

      Is there forever going to be some AnonHole asking this question every time a case involving Koh crops up?

  5. Crazy Operations Guy

    Another reason not to have every tech company in the same small area

    These companies put these in place to stave off the extreme amount of competition over the local talent pool and because California law does not recognize non-compete agreements. This can be fixed by moving offices to other cities/states, many of which would welcome them with open arms and hand out tax breaks like they are going out of style.

    The only good thing I've heard about California is that the weather is nice, but who cares about that when you have yearly droughts, massive wildfires, brownouts and an extreme cost of living.

    1. Nate Amsden

      Re: Another reason not to have every tech company in the same small area

      who cares? apparently a lot of folks since more and more are coming all the time it seems like.

      The job market is pretty crazy here for sure at least for tech, but for the most part I just see a bunch of companies I have no interest in working for. Having to shoo away 1-3 recruiters/week. It's gotten to the point where I don't even bother replying on linkedin anymore(eventually I do usually it's a week or three later though)

    2. Gannon (J.) Dick

      Re: Another reason not to have every tech company in the same small area

      Lucy Koh is a Federal Judge.

      "These companies put these in place to stave off the extreme amount of competition over the local talent pool and because California law does not recognize non-compete agreements. This can be fixed by moving offices to other cities/states, many of which would welcome them with open arms and hand out tax breaks like they are going out of style."

      These companies put "these" in place because they are racketeer influenced and corrupt organizations under section 901(a) of the Organized Crime Control Act of 1970.

      This can be "fixed" by demanding an immediate repatriation of offshore funds with the payment of taxes due.

      1. Don Jefe

        Re: Another reason not to have every tech company in the same small area

        Offshore funds are far outside the purview of a Federal Circuit Court Judge unless the funds are proven to have been acquired through committing a crime. Otherwise, the IRS is the only other agency that can force the repatriation of private overseas funds and then only the amount, plus fines and interest, that are owed for the fulfillment of tax obligations. Even then they can only pull overseas funds if the money is otherwise not available from inside the country.

        Beyond that, the specifics surrounding overseas funds are a function of trade agreements between two or more countries. Federal Judges do not have the authority to unilaterally override the provisions of international trade agreements. It's actually easier for a Judge to start a war than be granted the authority to alter, even temporarily, the terms of a trade agreement.

        1. Gannon (J.) Dick

          Re: Another reason not to have every tech company in the same small area

          Chill, Don.

          No, I don't expect a Federal Judge to stick her nose in Tax or Trade matters.

          OTOH, this could very easily be brought under the RICO statute which would certainly prevent future "misunderstandings" not only in Silicon Valley but elsewhere.

          Wage-Fixing is not a "cybercrime" and as you probably know Big Al Capone went down for Tax Evasion.

    3. Anonymous Coward
      Anonymous Coward

      Re: Another reason not to have every tech company in the same small area

      So you rather non compete clauses be a valid item ?

      Brown outs? have not had them since 2001. See Eron for the reason.

      Extreme coast of living ?? Buying a house $220k in Sacramento is not extreme. Once you leave the bay area housing prices drops. Wild fires depends on were you live.

      1. Crazy Operations Guy

        Re: Another reason not to have every tech company in the same small area

        Yeah, but how the hell would I get to work without having to commute for 4-5 hours each way on the parking lot they call a highway system. During a contract I had in the area, the cheapest apartment I could find anywhere near work was $3000/month for a 700 sqft closet, sorry, apartment.

        1. kain preacher

          Re: Another reason not to have every tech company in the same small area

          I call BS. Unless you are livening in sf a 700sqft apt goes for $1200 in silicon valley. Bad traffic is 2 hours to go 45 miles.

          1. Crazy Operations Guy

            Re: Another reason not to have every tech company in the same small area

            The company I was working for was just off Market Street in SF, I moved there because it took me so long to drive from Mountain View (A few blocks from the CalTrain 'San Antonio' station) to SF and find a parking space. I have no idea where you go that "2 hours for 45 miles" figure from, taking 101, 280 or El Camino Real took 2 hours to go 45 *meters* during rush hour (I had to get to work by 8 AM, no exceptions). At first I had tried CalTrain, BART and MUNI to get to work but the tight scheduling I needed and the constant threat of transit worker strikes forced me into driving.

            A year later the company built an office a few miles north-east of Seattle where I have a 1200 sqft apartment for $900 a month and the longest part of my commute is waiting for the elevator in my apartment. I am much happier and I'm sure many other tech workers would be too if companies moved to other, less crowded cities.

  6. Gannon (J.) Dick

    WTF ?

    Did this exchange take place in open court ?

    I can not believe that Justice is so blind, deaf, dumb and stupid that Administrative Mechanisms such as "Class Action" have any bearing whatsoever on the legal remedy suggested.

    ============================================

    However, the plaintiffs’ attorney Kelly Dermody said yesterday that the case faced serious risks if it went all the way through the trial and on to appeal, because the US Supreme Court hasn’t been kind to class-action suits lately.

    "Those are very, very real risks for plaintiffs," she said, adding that the settlement was already the largest antitrust employee deal ever reached "by far”.

    But Koh said she wasn’t so sure that the Supreme Court would get involved in this particular case.

    “If there was going to be good case for further restricting class actions, I'm not sure this is the one," she said.

  7. Anonymous Coward
    Anonymous Coward

    Shucks!

    Zuckerberg managed to slip out aqain.

    1. RedneckMother

      Re: Shucks!

      Zuck and Co eat steaks, and the workers eat baloney.

  8. William Donelson

    Criminal Prosecution

    I love Apple and their products, but when they and other companies break the law, there should be criminal prosecutions, NOT SETTLEMENTS. This goes double for banks and bankers.

    1. Anonymous Coward
      Anonymous Coward

      Re: Criminal Prosecution

      But the company is an entity in itself so the entity would go to prison rather than an individual.

      Maybe they could send 'Apple' to prison for 12 months which would mean that the brand can't be used for any marketing, products or packaging for that period?

      1. Don Jefe
        WTF?

        Re: Criminal Prosecution

        Just so I'm clear, you want taxpayers to fund Apple marketing? That's what forcibly preventing the company from using the brand identifiers amounts to. You're creating a new brand, the 'blank brand' and educating consumers about what the 'blank brand' means. It's the best marketing opportunity since literacy was invented.

  9. Anonymous Coward
    Anonymous Coward

    grossly inadequte

    3 months in chokey for the criminals who made them, and you would see this sort of agreement disappear like fog in the sun, from everywhere.

    Actually 26 weekends of PD cleaning up litter alongside the 101 and I'm sure Eric would be rethinking his personal dedication to the ratio of shareholder vs employee returns

  10. -tim

    This is a very small class

    This action has hurt wages all over the world. Where I work in Australia, this has a carry on effect of more than $40,000/year in wages in some some near the top of their field.

    1. Don Jefe

      Re: This is a very small class

      No, it has not has a $40k impact on Australian salaries. That's 30-40+ years of salary increase; rolled into a few year period? No. That absolutely has not occurred. Whoever is feeding you that is completely full of shit.

      1. -tim

        Re: This is a very small class

        I had that effect on people I know. For a start, $40k is about how much less someone from Melbourne gets when they work for Google than a US citizen for the same job. Oddly enough, if they work in the USA, they can't move to a different company (HB1+the law suit issue) nor can they move up since someone who makes more than them can't move to a different higher paying job either. This puts a limit on salaries in Australia as that extra $40k would have caused more of the top talent to move, leaving a bigger hole for local companies to throw more salary money at.

        1. Don Jefe

          Re: This is a very small class

          No. You've mashed four separate issues together. You're just wrong on the salary. Full stop.

          Moving on, H1-B portability usually just isn't worth messing with from an employers perspective. If the role is non-critical, which it obviously is if the employer is willing to wait for the new sponsor petition to be processed, it's easier just to get another Australian (or whatever). Dealing with the new sponsor petition as well as the ungrounded employee is just too much of a hassle when there are continents full of people with identical skill sets and experience.

          Furthermore, H1-B's can move up, the only qualifier is that a US Citizen or Lawful Permanent Resident is not available to fill the open position. Regardless, there's a sweet spot for H1-B's and the further above or below you are from that spot the less worthwhile it becomes to mess with them. They're not going to move up much, but not because the no hire deal.

          What you've identified is a (bunch of) problems with our immigration policies, it has nothing to do with the poaching arrangement being discussed. The issues you're talking about are rampant through the middle income professional section of every industry in the US, none of those issues are unique to the tech community. The only people that benefit from the H1-B program are the employers who game the system.

  11. eldakka Silver badge

    How big is the class?

    Whats the potential size of the class here?

    Assuming attorneys fees are 33%, that brings the settlement dow to about $213m.

    If the class was only 1k people, thats an impressive $213k each they'd get.

    But isn't the potential class ALL the IT employess of those companies in Silicon valley? If that was only 10k affected workers, its a lot less but still respectable $21.3k each.

    But are there only 10k workers? Whats a more reasonable number for IT employess of Google, Apple, Intel and Adobe in California (or is it just Silicon Valley?) 100k? more ? less? if we take the 100k figure, thats only $2130 each for several years of wage fixing ...

    1. Tom 13

      Re: How big is the class?

      I ran the numbers back in the article when El Reg first ran an article about the proposed settlement. The numbers looked to be on the right order of magnitude at the time for the number of people covered in the suit and appropriate increases in wages. And the worker classes necessarily need to be small in these types of cases or the courts throw out the suit because it "doesn't have an identifiable class" or some such. So unless the settlement amount changes from 213M to 2.13B forcing the suit into court is a craps shoot.

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