Judge rejects $324.5M deal between tech workers and Google, Apple, Intel & Adobe

Michael Nagle | Bloomberg | Getty Images/Georges Gobet | AFP | Getty Images

A U.S. judge on Friday rejected a $324.5 million settlement of a class action lawsuit filed by tech workers who accused four Silicon Valley giants including Apple and Google of conspiring to avoid poaching each other's workers.

The ruling by U.S. District Judge Lucy Koh in San Jose, California, said the proposed settlement amount "falls below the range of reasonableness." Intel and Adobe were also part of the deal.

In their 2011 lawsuit, the tech employees said the alleged conspiracy had limited their job mobility and, as a result, kept a lid on salaries.

The case has been closely watched due to the possibility of big damages being awarded and for the opportunity to peek into the world of some of America's elite tech firms.\

Calif. judge rejects tech settlement

Representatives for the companies, as well as plaintiff attorneys, were not immediately available for comment on Friday.

The four companies agreed to settle with the plaintiffs in April for a total of $324.5 million. The plaintiffs had planned to ask for about $3 billion in damages at trial, which could have tripled to $9 billion under antitrust law.

The case was based largely on emails in which Apple's late co-founder, Steve Jobs, former Google Chief Executive Officer Eric Schmidt and some of their Silicon Valley rivals hatched plans to avoid poaching each other's prized engineers.

In one email exchange after a Google recruiter solicited an Apple employee, Schmidt told Jobs that the recruiter would be fired, court documents show. Jobs then forwarded Schmidt's note to a top Apple human resources executive with a smiley face.

Plaintiff attorneys argued Koh should approve the deal because the workers faced serious risks on appeal had the case gone forward.

However, some tech workers filed objections to the settlement, saying both sides should go back to the negotiating table in the hopes of obtaining a larger amount.

The case in U.S. District Court, Northern District of California is In Re: High-Tech Employee Antitrust Litigation, 11-cv-2509.

--By Reuters