Apple, Google Appeal Rejection of $324.5 Million Settlement in Hiring Lawsuit

Four technology companies including Apple and Google blasted a U.S. judge for rejecting a proposed $324.5 million settlement over hiring practices in Silicon Valley and asked an appeals court to intervene, according to a court filing.

Plaintiff workers accused Apple, Google, Intel and Adobe in a 2011 lawsuit of conspiring to avoid poaching each other's employees.

Last month U.S. District Judge Lucy Koh in San Jose, California, rejected the proposed class action settlement, saying the amount was too low.

In a court filing late on Thursday, the companies asked the 9th U.S. Circuit Court of Appeals to overrule Koh's decision.

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Koh "committed clear legal error" and "impermissibly substituted the court's assessment of the value of the case for that of the parties who have been litigating the case for more than three years," they wrote.

Adobe declined to comment, as did an attorney for the plaintiffs. Representatives for the other three firms could not immediately be reached for comment.

Tech employees alleged that the conspiracy limited their job mobility and, as a result, kept a lid on salaries.

The case has been closely watched because of the possibility of big damages being awarded and for the opportunity of a glimpse into the world of some of America's elite tech firms.

Plaintiffs based their allegations of conspiracy largely on emails circulated among Apple's late co-founder Steve Jobs, former Google Chief Executive Officer Eric Schmidt, and some of their rivals.

Plaintiff attorneys argued Koh should approve the deal because the workers faced the risk of losing the case in an appeal.

In rejecting the proposed settlement, Koh cited "substantial and compelling evidence" that Jobs "was a, if not the, central figure in the alleged conspiracy."

Koh repeatedly referred to a related settlement last year involving Disney and Intuit. Apple and Google workers got proportionally less in the latest deal compared to the one involving Disney, Koh wrote.

To match the earlier settlement, the latest deal "would need to total at least $380 million," Koh wrote.

In the filing on Thursday, Apple, Google, Intel and Adobe said Koh's approach was "rigid and formulaic."

Instead of approving the deal, Koh "dismissed the parties' analysis of the trial risks, suggesting that, unless the settlement was larger, the court had - in its own words - 'wasted years on this case.'"

A hearing before Koh is scheduled for Sept. 10. Earlier this week both sides said they had resumed mediation talks.

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

© Thomson Reuters 2014