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Silicon Valley Anti-Poaching Antitrust Labor Lawsuit Settles

By William Peacock, Esq. on April 25, 2014 | Last updated on March 21, 2019

What did the rumors say? $9 billion? Try $324 million, a cheap price for Google, Apple, Intel, and Adobe, who probably would've spent that much on lawyers during the trial, which was only a few weeks away.

It smells like a nuisance settlement, which is extremely curious considering the now-public smoking gun emails between the companies' executives and the length of the conspiracy, which stretched on for years. The backroom agreements finally ended in 2010 when the Department of Justice intervened, but for years, the biggest employers in Silicon Valley conspired to depress wages. Now, they'll walk away for about $5,000 per head, assuming the settlement is approved by the court.

How Did We Get Here?

An e-discovery nightmare, that's how. We recount all of the dirty details again, since we've already poked fun at Steve Jobs, Sergey Brin, and others enough in our prior coverage. But the some of the emails seemed to be a smoking gun that screamed anticompetitive practices!

Last October, Judge Lucy Koh allowed the lawsuit to proceed after culling the class a bit, noting that the original mega-class of more than 100,000 employees lacked the required Dukes commonality -- bloggers, designers, and engineers were injured to different extents. Instead, a class of 64,000 technical employees was certified, a class that was rumored to be seeking $3 billion in damages (which would've meant $9 billion thanks to treble damages in antitrust cases).

Is That All?

With the emails, the billions of dollars worth of risk, and the PR nightmare that would go along with a labor dispute trial, it's a bit shocking that the case settled for such a pittance -- $324 million, or $5,000 a head.

Hack off a third for the lawyers, and we're talking a few grand per employee on average. In a hiring climate where companies convince students to drop out and join the workforce early, poach talent from others with massive bonuses, and even send hot girls to bars to chase engineers, the number looks even more diminutive.

Is Dukes to Blame?

The Dukes commonality standard has sank many a class action ship over the past few years, including the original voyage of 100,000 in this case.

Rich Gray, a Silicon Valley antitrust expert, told The Washington Post that the plaintiffs' attorneys risked having their apple cart overturned on appeal if the appellate courts didn't agree with Judge Koh's class certification. It's an interesting point, especially since the limits of the Dukes standard are still being debated in the circuit courts across the nation.

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