District Court Judge Approves Settlement in Silicon Valley No-Poaching Case | Practical Law

District Court Judge Approves Settlement in Silicon Valley No-Poaching Case | Practical Law

Judge Lucy H. Koh of the US District Court for the Northern District of California tentatively approved a $415 million settlement in a case alleging that various Silicon Valley employers entered into anticompetitive non-solicitation agreements in violation of Section 1 of the Sherman Act.

District Court Judge Approves Settlement in Silicon Valley No-Poaching Case

Practical Law Legal Update 2-603-5827 (Approx. 3 pages)

District Court Judge Approves Settlement in Silicon Valley No-Poaching Case

Law stated as of 09 Mar 2015 • USA (National/Federal)
Judge Lucy H. Koh of the US District Court for the Northern District of California tentatively approved a $415 million settlement in a case alleging that various Silicon Valley employers entered into anticompetitive non-solicitation agreements in violation of Section 1 of the Sherman Act.
On March 4, 2015, Judge Lucy H. Koh of the US District Court for the Northern District of California tentatively approved a $415 million settlement in In re High-Tech Employee Antitrust Litigation with defendants Apple, Google, Intel and Adobe. Plaintiffs, a class of 64,000 highly skilled salaried employees, alleged that Silicon Valley companies agreed not to solicit each other's employees in order to suppress wages in violation of Section 1 of the Sherman Act. Specifically, the plaintiffs' complaint alleges that the companies entered into bilateral agreements that:
  • Barred cold calling each other's employees, which is a common industry recruiting practice.
  • Required one company to notify the other when making an offer to the other's employee, without the employee's consent.
  • Contained no limitations as to time period, job function or geography.
The DOJ challenged the same conduct in 2010, resulting in consent decrees prohibiting the non-solicitation agreements.
Judge Koh had previously rejected a settlement with the same four defendants of $324.5 million, finding that it did not adequately compensate the class after attorneys' fees were accounted for. Judge Koh invited final comments on the new settlement and indicated that she would grant final approval on June 9. Lucasfilm, Pixar and Intuit previously settled with the plaintiffs for $20 million.
For more information on the antitrust implications of non-solicitation agreements, including a detailed discussion of In re High-Tech Employee Antitrust Litigation, see Practice Note, Non-solicitation Agreements.