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posted by janrinok on Thursday March 05 2015, @03:31PM   Printer-friendly
from the better-but-not-good dept.

Ars Technica reports:

On Wednesday, US District Judge Lucy Koh granted preliminary approval for a settlement between four top tech companies—Apple, Google, Adobe, and Intel—and their former employees. The employees launched a class action suit against the companies after the Justice Department sued the top tech firms for anti-competitive labor practices in 2010.

The Justice Department had accused Apple, Google, and other top tech firms of agreeing not to approach each others’ engineers with better employment offers. The employees estimated that they collectively lost out on $3 billion in wages because competing companies would not give them better offers.

Employees of Apple, Google, Adobe, and Intel pursued a larger settlement [...]. Originally, lawyers for the two sides agreed to a $324.5 million settlement for the employees. But with 64,000 former employees looking to reclaim lost wages, that amounted to a paltry $5,000 per person. Freelance programmer and representative plaintiff Michael Devine protested the agreement his side’s lawyers agreed to, and Judge Koh agreed with him, calling the settlement "below the range of reasonableness.”

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  • (Score: 3, Interesting) by ikanreed on Thursday March 05 2015, @03:33PM

    by ikanreed (3164) Subscriber Badge on Thursday March 05 2015, @03:33PM (#153536) Journal

    I mean, on the one hand, $400 megabucks is more than a bit of money, even for apple and google. On the other hand, paying employees what they're worth is expensive.

    • (Score: 4, Insightful) by Thexalon on Thursday March 05 2015, @03:41PM

      by Thexalon (636) on Thursday March 05 2015, @03:41PM (#153539)

      I have to assume that if they continue to form these kinds of agreements, the next case will be more expensive, and contempt citations may be in play as well. Courts do not tend to look favorably on people and organizations caught committing the same bad act multiple times, meaning the second case is both easier to prove and leads to higher damages.

      --
      The only thing that stops a bad guy with a compiler is a good guy with a compiler.
      • (Score: 0) by Anonymous Coward on Thursday March 05 2015, @04:06PM

        by Anonymous Coward on Thursday March 05 2015, @04:06PM (#153546)

        > I have to assume that if they continue to form these kinds of agreements, the next case will be more expensive

        Yeah, this particular door is now closed. But the underlying goal of minimizing the cost of human 'resources' is still alive and strong. They will just seek out another path to the same place. Now that Jobs is dead they will have to rely on someone else's genius to figure out what that path will be. Perhaps Zuckerberg's pro-H1B super-pac will do it. [businessinsider.com]

        • (Score: 0) by Anonymous Coward on Thursday March 05 2015, @07:28PM

          by Anonymous Coward on Thursday March 05 2015, @07:28PM (#153607)

          Will you please stop repeating that fallacy about H1B's... Have you been through the H1B process? No? I have... yes I have... And it's nothing like what you people make it out to be...

          • (Score: 1, Informative) by Anonymous Coward on Thursday March 05 2015, @07:57PM

            by Anonymous Coward on Thursday March 05 2015, @07:57PM (#153625)

            > Have you been through the H1B process? No? I have

            Hey AC, congratulations on being the exception.
            Don't be the fool who thinks that because they are lucky everyone else is too.
            The top ten employers of H1B visa holders, [npr.org] accounting for roughly half the visas, use them in the process of off-shoring.

          • (Score: 2) by kaszz on Friday March 06 2015, @08:37AM

            by kaszz (4211) on Friday March 06 2015, @08:37AM (#153759) Journal

            You aren't from India right? ;)

      • (Score: 4, Insightful) by Anonymous Coward on Thursday March 05 2015, @04:06PM

        by Anonymous Coward on Thursday March 05 2015, @04:06PM (#153548)

        If the calculated loss in wages is $3000M, than $415M settlement isn't even a slap on the wrist. Maybe you're right and next time it will be easier to prove and add some contempt citations.
        But the companies now have 1 data point: Screw over your employees, breaking the law doing it, earn $2585M.
        Even if they have to pay 4 x as much next time, they'll still earn loads of money from doing it.

        Question ofcourse, the claimed $3000M in lost wages, is that calculated, speculated or mpaa style fabricated?

        • (Score: 1) by art guerrilla on Friday March 06 2015, @01:50AM

          by art guerrilla (3082) on Friday March 06 2015, @01:50AM (#153692)

          further (IANAL-TG), but don't they write those fines off as bidness expenses ? ? ?

          in essence, aren't WE peons taxed more to make up for this little bit of profitable immorality ? ? ?

      • (Score: 3, Insightful) by ikanreed on Thursday March 05 2015, @04:15PM

        by ikanreed (3164) Subscriber Badge on Thursday March 05 2015, @04:15PM (#153552) Journal

        Yeah, but all they have to do to avoid that is have good deniability. No written records of the plan. No accidentally telling applicants "we don't hire people from [other company]"

        Oh shit. I'm the nutty conspiracist.

    • (Score: 2) by jcross on Thursday March 05 2015, @04:51PM

      by jcross (4009) on Thursday March 05 2015, @04:51PM (#153560)

      Anyone know if this qualifies for treble damages? It seems pretty clear that the violation of the law was willful. None of the execs in question are/were idiots.

    • (Score: 3, Insightful) by Immerman on Thursday March 05 2015, @05:07PM

      by Immerman (3985) on Thursday March 05 2015, @05:07PM (#153564)

      Of course not. I mean they only came out $2.6 billion ahead instead of the $3 billion they were aiming for - that kind of disappointment should sour them on such abuses forever...

  • (Score: 5, Insightful) by MrGuy on Thursday March 05 2015, @04:04PM

    by MrGuy (1007) on Thursday March 05 2015, @04:04PM (#153545)

    Originally, lawyers for the two sides agreed to a $324.5 million settlement for the employees. But with 64,000 former employees looking to reclaim lost wages, that amounted to a paltry $5,000 per person. Freelance programmer and representative plaintiff Michael Devine protested the agreement his side’s lawyers agreed to, and Judge Koh agreed with him, calling the settlement "below the range of reasonableness.”

    So, lemme get this straight. $324.5 million, or $5,070 per employee, is clearly unreasonable.
    However, $415 million, or $6,480 per employee, is TOTALLY reasonable?

    • (Score: 3, Informative) by Immerman on Thursday March 05 2015, @05:10PM

      by Immerman (3985) on Thursday March 05 2015, @05:10PM (#153565)

      The judge must have been referring to the size of his bribe rather than the official settlement.

      • (Score: 2) by Nerdfest on Thursday March 05 2015, @07:54PM

        by Nerdfest (80) on Thursday March 05 2015, @07:54PM (#153621)

        This is Lucy Koh again, the judge that typically has a very pro-Apple bias, at least in cases against overseas companies. However, that said, many employees might get more than $6000 by hopping companies, but most wouldn't get anything, so perhaps it's a decent compromise. An award to all employees that's closer to the amounts that top employees would get by switching would be a more punitive award, rather than merely fair.

        • (Score: 5, Insightful) by Immerman on Thursday March 05 2015, @08:31PM

          by Immerman (3985) on Thursday March 05 2015, @08:31PM (#153643)

          Well, if the estimate is that the companies saved $3 billion in salaries, then a non-punitive fine would seem to be more in line with $3 billion, just to prevent the companies from retaining ill-gotten gains. If I stole 3 billion dollars, I'd be absolutely thrilled to be allowed to pay a paltry $400 million in fines and go on my way - I'd be planning my next heist before the check had cleared.

          • (Score: 2) by quadrox on Friday March 06 2015, @06:46AM

            by quadrox (315) on Friday March 06 2015, @06:46AM (#153741)

            Not disagreeing with your main point in any way, but if you had just gotten 2.6 billion dollars for free, would you really need to plan another heist immediately? Myself, I would probably start with a good long vacation :)

            • (Score: 2) by Immerman on Friday March 06 2015, @02:14PM

              by Immerman (3985) on Friday March 06 2015, @02:14PM (#153832)

              Not need to, but the legal system could wise up at any moment - gotta make hay while the sun shines.

    • (Score: 3, Interesting) by fadrian on Thursday March 05 2015, @07:33PM

      by fadrian (3194) on Thursday March 05 2015, @07:33PM (#153611) Homepage

      Let's put it this way - no one's getting life-changing money here (except maybe the lawyers), in any case. Let's do the numbers - 3B in claims => even w/treble damages, total award per person is ~$140K - probably about 1-1.5 yr. salary in the Bay Area, even less for the people who were actually likely to be poached. That's before the lawyers get their cut. On the other hand, the employees really didn't lose a lot - a chance to transfer from one stupid cubicle job to another stupid cubicle job for maybe a few more non-life-changing bucks. So really, do they deserve that much recompense?

      Yes, bug companies suck - I get that; I believe that there are many disadvantages to size that idiots at the head of the latest corporate behemoth tend to overlook, one of which is the tendency to act like a bully, which no one really cares for. In this case, there seems to be quite a lot of angst here about the situation, probably because it cuts a little too close to bone and the people getting screwed are a bit too much like us in this case. In reality, it is not a person or a corporation that is doing the screwing. It is the system that is causing everyone that works inside it to screw each other. So do your best not to add to the screwing. Treat your fellow man honestly, expect him to do the same. However, corporations are political constructs, protected by political interests - you should consider them fair game.

      --
      That is all.
      • (Score: 5, Insightful) by MrGuy on Thursday March 05 2015, @07:50PM

        by MrGuy (1007) on Thursday March 05 2015, @07:50PM (#153618)

        On the other hand, the employees really didn't lose a lot - a chance to transfer from one stupid cubicle job to another stupid cubicle job for maybe a few more non-life-changing bucks.

        They lost a lot more than that. These employees likely have a lower standard of living for life because of this. And, no, that's not hyperbole. Because (in most jobs) your salary isn't determined by "what you're worth" so much as "how much did we pay you before" and some raise percentage. This is even true when changing jobs - many companies ask for a salary history and will offer something accordingly.

        Let's say an engineer at Apple was making $100k/yr, and there was a position at Google for $120k/yr that the engineer would have been a good fit for, but wasn't offered due to the bad conduct. Instead, the engineer took a job elsewhere for $110k/yr.

        All else equal, that loss of salary will stick with the engineer through the rest of their career. Because if a "good job" performance rating is a 5% raise, then the engineer gets a smaller raise with the smaller base salary. They'll never "catch up" to where the earnings would have been if they'd gotten the larger base salary. The first year, the engineer will have lost $10k. The second year, they have lost MORE than $10k (because of the smaller raise), and the next year lost more still, compared to where they would be at a higher base.

        Even if the engineer moves on to another company, the salary negotiations will likely start at and end at a lower point than they would have if the engineer made more.

        Even if the new job is "better" and the engineer is happier than they would have been at Google, having that offer from Google would have given them more salary leverage and likely a higher base (maybe they could have negotiated to $115k instead of $110k).

        Robbing employees (and that's what this is - theft) of the leverage to seek and receive a higher salary is a decision with long-lasting consequences for the employee.

        • (Score: 2, Informative) by Anonymous Coward on Thursday March 05 2015, @10:03PM

          by Anonymous Coward on Thursday March 05 2015, @10:03PM (#153663)

          > This is even true when changing jobs - many companies ask for a salary history and will offer something accordingly.

          Not in silicon valley they don't. I've never encountered that. And if I did, I would lie my ass off because they have no way to independently verify without breaking the law. Company hopping is the standard way to get a raise here.

      • (Score: 0) by Anonymous Coward on Thursday March 05 2015, @08:15PM

        by Anonymous Coward on Thursday March 05 2015, @08:15PM (#153635)

        So, let's face it, the CEOs didn't get a lot out of cheating employees, just a slightly bigger second yacht.

  • (Score: 2, Interesting) by srobert on Thursday March 05 2015, @04:06PM

    by srobert (4803) on Thursday March 05 2015, @04:06PM (#153547)

    Introductory econ classes focus on monopoly (and oligopoly) as an example of market power. They tend to ignore examples of market power on the buyers' side. This sounds to me like an example of oligopsony. It's one of the reasons we should encourage collective bargaining to correct the imbalance of power. As if to prove my point, as I type, the spell checker for this comment does not recognize the words "oligopsony" or "monopsony".

    • (Score: 0) by Anonymous Coward on Friday March 06 2015, @12:30PM

      by Anonymous Coward on Friday March 06 2015, @12:30PM (#153813)

      Like any intelligent tool, the spell-checker is rejecting the "Sony" part.

  • (Score: 5, Informative) by MrGuy on Thursday March 05 2015, @04:38PM

    by MrGuy (1007) on Thursday March 05 2015, @04:38PM (#153556)

    are the lawyers.

    I don't know how much the "class" will be paying "their" lawyers in this case, but from other large class action cases I've seen, it will be a lot. I've seen a third of the total settlement being divvied up between lawyers on other suits.

    And it seems that's roughly the class we're in for this settlement. TFA is silent on it for this version of the settlement, but according to Ars, [arstechnica.com] the original settlement of $324 million would have gotten employees an average payout of $3,572. However, if you look at the gross number of $324 million and 64,000 employees, the GROSS payout would have been $5,070 per employee. Which means the lawyers were getting $1,498 per employee on average from the original settlement, which is 30%.

    It also means the lawyers "representing" the class just made themselves an extra $27 million for all their hard work between the original settlement and now. Well earned, no doubt.

    • (Score: 3, Interesting) by Covalent on Thursday March 05 2015, @06:43PM

      by Covalent (43) on Thursday March 05 2015, @06:43PM (#153591) Journal

      Not only that, but at what rate is this $3,500 taxed? My guess is that it'll fall between 28% and 39.6% for most tax payers (http://www.bankrate.com/finance/taxes/tax-brackets.aspx) in this class.

      So they end up with about $2,500 bucks, or less than one bonus paycheck for most of these workers.

      Seems like a complete waste of effort, considering the companies in question here will most likely just change tactics and continue to screw their workers.

      --
      You can't rationally argue somebody out of a position they didn't rationally get into.
    • (Score: 2) by DeathMonkey on Thursday March 05 2015, @06:48PM

      by DeathMonkey (1380) on Thursday March 05 2015, @06:48PM (#153592) Journal

      No, the real winners are participants in the labor market.

  • (Score: 2) by bradley13 on Thursday March 05 2015, @05:36PM

    by bradley13 (3053) on Thursday March 05 2015, @05:36PM (#153575) Homepage Journal

    Oddly, none of the linked articles mention the payout to the lawyers. Normally, they get a percentage of the payout, so likely that means that the employees will get less. Probably considerably less...

    --
    Everyone is somebody else's weirdo.
  • (Score: 1, Interesting) by Anonymous Coward on Friday March 06 2015, @12:50AM

    by Anonymous Coward on Friday March 06 2015, @12:50AM (#153689)

    These companies will gladly do this again, because this fine isn't even a slap on the wrist. These are multi-billion dollar companies. They will pay this fine from what is in the couch cushions.