Aug 8, 2014 · 3 minutes

The judge overseeing the landmark Silicon Valley wage theft antitrust lawsuit has struck down the $324 million settlement reached between most of the class action plaintiffs and the defendants — Apple, Google, Intel and Adobe.

In her 32-page order striking down the settlement terms, issued just moments ago, US District Judge Lucy Koch writes:

"This Court has lived with this case for nearly three years, and during that time, the Court has reviewed a significant number of documents in adjudicating not only the substantive motions, but also the voluminous sealing requests. Having done so, the Court cannot conclude that the instant settlement falls within the range of reasonableness. As this Court stated in its summary judgment order, there is ample evidence of an overarching conspiracy between the seven Defendants..."
This is stunning news, and it means that we still may get a trial after all, and learn more about the Techtopus wage theft conspiracy.

Judge Koh bases her rejection by comparing the $324 million sum to the earlier settlement in 2013 with three other defendants in the wage-theft lawsuit: Intuit, LucasFilm and Pixar. Judging by that metric, Judge Koh argues that the settlement figure should have been at least $380 million. She also cites the "strength" of the plaintiffs' case against the Big Tech defendants, and rejects the plaintiffs' attorneys' argument about the difficulties in winning an antitrust wage theft lawsuit of this scope.

As we've reported earlier, this is the first case experts know of in which antitrust law was used to successfully certify a class action wage theft lawsuit.

Here are some excerpts from Judge Koh's order denying the settlement:

"The Court is concerned that Class members recover less on a proportional basis from the instant settlement with Remaining Defendants than from the settlement with the Settled Defendants a year ago, despite the fact that the case has progressed consistently in the Class’s favor since then."


"Using the Settled Defendants’ settlements as a yardstick, the appropriate benchmark settlement for the Remaining Defendants would be at least $380 million, more than $50 million greater than what the instant settlement provides."
Elsewhere, Judge Koh shoots down the plaintiffs' assertion that the case against Lucasfilm and Pixar, already settled, was any stronger than the case against Apple, Google, Intel and Adobe. Describing Steve Jobs' role as "a, if not the, central figure in the alleged conspiracy," Judge Koh writes:
"Plaintiffs are correct that there are particularly clear statements from Lucasfilm and Pixar executives regarding the nature and goals of the alleged conspiracy. Specifically, Edward Catmull (Pixar President) conceded in his deposition that anti- solicitation agreements were in place because solicitation 'messes up the pay structure.' Similarly, George Lucas (former Lucasfilm Chairman of the Board and CEO) stated, 'we cannot get into a bidding war with other companies because we don’t have the margins for that sort of thing.'

"However, there is equally compelling evidence that comes from the documents of the Remaining Defendants. This is particularly true for Google and Apple, the executives of which extensively discussed and enforced the anti-solicitation agreements. Specifically, as discussed in extensive detail in this Court’s previous orders, Steve Jobs (Co-Founder, Former Chairman, and Former CEO of Apple, Former CEO of Pixar), Eric Schmidt (Google Executive Chairman, Member of the Board of Directors, and former CEO), and Bill Campbell (Chairman of Intuit Board of Directors, Co-Lead Director of Apple, and advisor to Google) were key players in creating and enforcing the anti-solicitation agreements." As I've written before, Judge Koh is an intense, brilliant and ambitious judge. She clearly grasps the larger political angles and significance of this case, and she will not allow it to end with a whimper.

More as this develops...

For more background on the Silicon Valley wage theft story, read: "The Techtopus: How Silicon Valley’s most celebrated CEOs conspired to drive down 100,000 tech engineers’ wages”; "Revealed: Apple and Google’s wage-fixing cartel involved dozens more companies, over one million employees”. Read all of Pando's Techtopus series on Big Tech wage theft here.


Judge Denies Techtopus Settlement Aug2014a