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By | Iain Thomson 16th January 2015 02:26

Ex-Apple, Google, Intel geeks in line for $415m over wage-fix pacts

Dead Steve Jobs' legacy, right there

As expected, a four-year-long wage-fixing case could be over – after Google, Apple, Intel and Adobe offered to pay out $415m to make the case go away.

The foursome are trying to settle a class-action lawsuit brought by former employees over claims senior management quietly entered a pact to not poach each other's staff. This effectively kept engineers' wages relatively low as the deal meant no company could offer techies a salary increase to defect.

The US Department of Justice investigated the claims in 2010 and found some evidence of collusion, but agreed to levy no fines and assign no responsibility provided the tech giants agreed to cease and desist all contact on the matter. Employees, current and former, promptly sued execs in San Jose, California.

In May, the companies offered a $324.5m settlement, which was accepted by the lawyers representing the employees, although some plaintiffs objected that was far too little. Unfortunately for Intel et al, Judge Lucy Koh agreed, and struck down the settlement as too low. That sent the two sides back to the negotiating table.

The no-poaching pacts are alleged to have been started by the late Apple cofounder Steve Jobs, who was apparently upset at either losing staff or having to pay them more to keep them. He approached a number of companies and reached no-hire deals, including – it is claimed – with Google's Eric Schmidt.

He had less luck with other firms, however. Emails submitted as evidence showed Palm CEO Ed Colligan spurned Jobs' offer of an illegal deal, even when the head of Apple threatened to start bringing lengthy and expensive patent litigation against the biz. Facebook claims it too declined to take part in the alleged conspiracy.

Judge Koh still has to approve this deal, but she looks likely to do so, since she has hinted that $400m would be fair. If she does, and the lawyers take their customary 30 per cent cut, it would leave about a quarter of a billion dollars to go to wronged ex-employees. ®

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