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Apple wage theft class action lawsuitU.S. District Court Judge Lucy H. Koh rejected a proposed settlement that would have awarded plaintiffs $324.5 million to end the wage theft class action lawsuit that accuses major software companies of entering into an illegal deal to hire each other’s engineers and suppress wages.

Google Inc., Apple Inc., Intel Corp., and Adobe Systems Inc. were all accused of entering into a secret agreement to not recruit or hire each other’s software engineers, illegal under Sherman Anti-Trust Act. In the spring, the software companies and certain named plaintiffs indicated they had struck a settlement deal, however, in June, named plaintiff Michael Devine, filed an objection to the class action settlement arguing that the $324.5 million proposed was inadequate in light of evidence presented by the plaintiffs and the software companies’ ability to pay and would not deter future anti-trust behavior by the companies.

Judge Lucy Koh agreed with plaintiff Devine, issuing an order denying the settling plaintiffs’ and software companies’ motion for preliminary approval of the class action 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,” wrote Judge Koh. The judge also noted, “There is substantial and compelling evidence that Steve Jobs (Co-Founder, Former Chairman, and Former CEO of Apple, Former CEO of Pixar) was a, if not the, central figure in the alleged conspiracy.”

In rejecting the proposed class action settlement, Judge Koh said, “Counsel’s sole explanation for this reduced figure is that there are weaknesses in plaintiffs’ case such that the class faces a substantial risk of non-recovery. However, that risk existed and was even greater when plaintiffs settled with the settled defendants a year ago, when class certification had been denied.” The judge wrote that the class action settlement should amount to a minimum of $380 million, pointing out that last year two other companies, Lucasfilm Ltd., Pixar Animation, and Intel Inc. paid a total of $20 million to exit the class action lawsuit last year. Judge Koh also rejected the settling parties’ argument that the settlement amount should be based on the total number of Class Members who were employed, not the total compensation those Class Members would have received, noting “[c]ounsel has provided no basis for why the number of class members employed by each defendant is a relevant metric.” Furthermore, the judge wrote in her order, “the relevant inquiry has always been total class compensation.”

The proposed settlement rejected by Judge Koh had been introduced by the parties shortly before the trial was set to begin. The class action lawsuit stemmed from a Department of Justice probe into the tech companies’ hiring practices in 2012.

The settling plaintiffs are represented by Lieff Cabraser Heimann & Bernstein LLP and Joseph Saveri Law Firm Inc.

The Silicon Valley Wage Theft Class Action Lawsuits are consolidated as In re: High-Tech Employee Antitrust Litigation, Case No. 11-cv-02509, in the U.S. District Court for the Northern District of California.

UPDATE: The high-tech employee class action settlement has paid out! Checks were mailed the week of December 21, 2015. If you received a check, let us know in the comments. Congrats to everyone who got paid!

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