11 ms·

Google and Apple in $415M 'non-poaching' settlement offer

107 points by pierre-renaux 12y ago

rewqfdsa 12y ago
$415 million is still pitifully low. At what point will the judge just force a trial?
- Igglyboo 12y ago
  Seriously, it needs to be 10x this to makeup for all the money they saved, and 100x this to make sure they never do it again.
  - loceng 12y ago
    $41.5 billion? Yup, that'd probably stop any companies from trying this again.
    - atburrow 12y ago
      $4.15 billion.
      - tartuffe78 12y ago
        $4.15 billion would be 10x, and $41.5 billion would be 100x
adevine 12y ago
Yeah, this seems silly to me. Judges very rarely reject settlement offers, so if 324.5 million was deemed so low as to reject the settlement, bumping it up a bit to 415 doesn't make much of a difference.
- EC1 12y ago
  What planet do you live on where $100m is chump change?
  - _broody 12y ago
    The settlement offer is off by an order of magnitude or more from where it should be, that's what the OP means. The tech companies screwed their employees out of a lot more money than this, and this being a class-action lawsuit $100m means a pitiful amount of money being distributed among the plaintiffs. Oh, and have you seen Apple's and Google's quartely revenue reports? This definitely is chump change to them.
  - tomp 12y ago
    Well, if the size of the class is 50000 workers, that amounts to about 2000 per worker... about a weeks wage?
    - wyldfire 12y ago
      Who's eligible for the class? Only employees of those corporations? Or the tech/engineering marketplace at large?
      - Timothee 12y ago
        My understanding is that it's only people who were employees of these companies at the time, though it's easy to argue that anybody in the tech industry was indirectly affected. I.e. the salary paid to these employees influences the salary expected to be paid to people doing the same at a different company. Especially considering the size and importance of the companies involved. Strangely, I haven't seen this discussed much in articles about this scandal. (of course I say that as someone who did not work at any of the involved companies)
  - colechristensen 12y ago
    The planet where $100m divided over 64,000 employees affected comes to ~$1500 per employee i.e. chump change. The planet where Google's yearly revenue is over $50bn and Apple is the most valuable company in the world.
- smackfu 12y ago
  When Judge Koh rejected the original settlement, she suggested that she expected a minimum settlement amount of $380 million, based on the previous settlements that had been done by other companies in this case. So the new amount probably does make a difference.
- nksdnkvdnkdokmo 12y ago
  The lesson for large companies to learn here is that you can get away with this kind of thing for a song. In order for this behavior not to happen again, the outcome needed to have been penalties around 3x what each company "saved" by depressing wages.
- bradleyjg 12y ago
  It seems fairly likely the judge will approve the settlement. First, one of the reasons the judge gave for rejecting the prior settlement was that it was lower per plaintiff than the class lawyers had negotiated with the defendants it had already settled with (Adobe et. al). That objection is now answered. Second, as you mention, judges very rarely reject settlement offers. That's in no small part because when they do, they are often overruled by appellate courts, and judges hate being overruled. As much as class actions lawsuits look like they create massive principle-agent problems to the rest of us, the federal courts are quite comfortable with them, and they have repeatedly applied the maxim that the law favors settlement in the class context. If there is to be class action reform it will have to come from Congress (the Class Action Fairness Act of 2005 was a tiny step in that direction).
billyhoffman 12y ago
It is a mistake to view the settlement through the lens of "$X paid per person." These companies colluded to depress the wages of an entire industry. "50,000" people were not effected. "64,000" people were not effected. Those numbers are just the work forces of the companies involved in the lawsuit. The entire greater Bay area technology job sector, one of the highest paid jobs in America, in the region of its highest concentration, was artificially depressed. These companies put a ceiling on what a given job was worth. If you work in Silicon valley in technology, you were effected. The ability to moved to another company and get paid what you are worth was effected. The shear scope and damage these companies did is almost beyond belief. We are not talking hundreds of millions of dollars. We are talking Billions and Billions. The ripple effects are even crazier. How many new technology companies did not get created because people's depressed salaries reduced how much they could save to bootstrap something new? How much did technology workers not spend into the service industry or the larger economy, because they were underpaid? This is a staggeringly insidious act with wide reaching repercussions beyond Adobe poaching some PhDs from Google, or vice versa.
- ElijahLynn 12y ago
  Another great contribution to society by Steve Jobs.
  - billyhoffman 12y ago
    I know this is kind of a throw away poke at Steve Jobs, but its very believable as well. In fact, the selfishness that Jobs displayed repeatedly in his life helps you understand how this whole thing happened. I can totally see Steve Jobs says "damn it, I'm trying to make cool stuff and these 2-3 other companies get stealing my guys. Stop doing that so we can go back to making awesome stuff!" But that's the problem and my broader point. These companies acted to reduce churn of top talent and possibly secondarily to save some cash. I can see this seeming like a good idea. But the broader ramifications of their actions are insane.
    - sophacles 12y ago
kolbe 12y ago
Cost of a chat service company with 55 employees:.......................... $19,000,000,000 Cost of systematically colluding to depress the wages of employees:....... $415,000,000
- deleted 12y ago
  [deleted]
  - krrrh 12y ago
    Your comment depends on the interpretation of the word 'free' in 'free market', and it's why many economists would argue that anti-cartel legislation that makes actions like this illegal is necessary to protect the free market. ie. A market can become less free through bad government regulation which limits competition, but it can also become less free through the collusion of some market participants in a trust which limits the ability of other participants to truck barter and trade.
  - webXL 12y ago
    Not sure what point you're trying to a make. If the market were controlled, wages would have increased? Or there's a problem with that $19B price tag?
  - icebraining 12y ago
    How did you let the market run free? There were regulations to prevent this. If anything, this is an example of their ineffectiveness.
    - 0xDOOD 12y ago
      Do regulations really exist to prevent crime, or to threaten punishment when it occurs? Arguably, neither a free market or a regulated market can prevent any criminal activity.
      - Retric 12y ago
        That's irrelevant; clearly some people change their behavior due to the risk of breaking the law. However, unenforced rules (ie driving 56mph in a 55mph zone) are generally ignored.
billpg 12y ago
"Poaching"? Do they see their employees as property or something?
- canvia 12y ago
  resources to be utilized as "efficiently" as will be tolerated
droopybuns 12y ago
I want to see executives in jail over this.
deleted 12y ago
[deleted]
- dpark 12y ago
  Pretty sure the lawyers are the ones proposing and accepting. The lawyers for the plaintiffs generally receive about 25% of the award. So while $6500 (actually more like $5000 after lawyer fees) is a small amount for each person in the class, $103 million is a lovely amount for the lawyers, so you can see why they'd accept the deal.
  - gcb0 12y ago
    the class system should really limit it to some percentage of the whole award, not over 2x the individual damages.
    - kansface 12y ago
      Under your proposal, petit-torts would never be subject to class action suits since the lawyers would never make money.
      - gcb0 12y ago
        not sure what are petit-torts. but that is probably a good thing.
- a3camero 12y ago
  The key is that this is lawyer-driven not employee driven. Lawyers drive class actions and they typically get a (large) percentage of the settlement. Those 64000 employees won't have much of a say in this.
  - deleted 12y ago
    [deleted]
smackfu 12y ago
Remember that it's a settlement to avoid a trial. The settlement amount is going to be somewhere in between $0 and the real damages, modified by the odds of winning the trial. Additionally, the lawyers in a class action have a real aversion to going to trial, since they are working on contingency and get nothing if it goes to trial and they lose. That should drive the settlement offer down too.
- jacquesm 12y ago
  It would seem then that that is an excellent reason to litigate this on your own rather than through a class action.
  - deleted 12y ago
    [deleted]
- smackfu 12y ago
  Forgot to mention, you also have to make the distinction between actual damages and trial damages. We've seen in many cases that damages were not as high as requested, and then were lowered upon appeal.
dsugarman 12y ago
This is horrible timing with Immigration Reform. The incorrect argument that tech companies want reform to keep wages low is going to get a lot of fuel if they don't agree to a reasonable settlement soon. The long term effects of letting highly skilled immigrants in to join and start companies on the tech industry is an order of magnitude higher than paying a couple $b to right the wrong for Google and Apple.
yuhong 12y ago
I really hope Apple/Google will do admission of wrongdoing with an apology letter, as I suggested before.
- presootto 12y ago
  Exactly right. I'm still waiting for Eric Schmidt and the other Google execs involved in this to issue a public apology. What was Google's motto again? Don't be what? Disclaimer: I work for TAGA (The Arrogant Google Assholes)
afking 12y ago
Is this not Capitalism? Lowering costs. If your worth more then what you are getting paid, quit? Ask for a raise? Seems bad to expect companies to just drop fantastic paying jobs into your laps. Government regulation to increase wage prices, seems like communism.
- ForHackernews 12y ago
  No, capitalism is supposed to involve companies competing with one another (including competing for employee talent), not colluding with their nominal competitors. That's an oligopoly or cartel and it's a market failure similar to a monopoly.
  - igonvalue 12y ago
    I agree with the spirit of what you're saying, but I think it's more accurate to call what you're describing a "free market" than "capitalism"; the latter does not in fact preclude market failures such as oligopolies/cartels.
chmartin 12y ago
The evidence is the email. A crime was committed. forget the settlement, the CEOs need to go to jail
- walshemj 12y ago
  just ban them from being director for 10 years - you have sacked yourself and all those options that haven't vested back to the company they go. Or start enforcing the fit and proper persons test for senior managers.
bluecalm 12y ago
There aren't many things you can do to make people worse off at that scale. It's 50-60k employees and hundred thousands more affected by this to some extent. I mean, if you rob a supermarket or a bank it's like a drop in the ocean damage comparing to what executives at Google and Apple did. Why aren't people involved prosecuted, jailed or at least permanently removed form any positions of power and/or influence ? Every time I read this emails it's my "I don't want to live in this world any longer moment". I mean some of those "I don't want to leave paper trail we can be sued over" people are still in prominent positions today.

107 points by pierre-renaux 12y ago

rewqfdsa 12y ago

$415 million is still pitifully low. At what point will the judge just force a trial?

Igglyboo 12y ago
Seriously, it needs to be 10x this to makeup for all the money they saved, and 100x this to make sure they never do it again.
- loceng 12y ago
  $41.5 billion? Yup, that'd probably stop any companies from trying this again.
  - atburrow 12y ago
    $4.15 billion.
    - tartuffe78 12y ago
      $4.15 billion would be 10x, and $41.5 billion would be 100x

adevine 12y ago

Yeah, this seems silly to me. Judges very rarely reject settlement offers, so if 324.5 million was deemed so low as to reject the settlement, bumping it up a bit to 415 doesn't make much of a difference.

EC1 12y ago
What planet do you live on where $100m is chump change?
- _broody 12y ago
  The settlement offer is off by an order of magnitude or more from where it should be, that's what the OP means. The tech companies screwed their employees out of a lot more money than this, and this being a class-action lawsuit $100m means a pitiful amount of money being distributed among the plaintiffs. Oh, and have you seen Apple's and Google's quartely revenue reports? This definitely is chump change to them.
- tomp 12y ago
  Well, if the size of the class is 50000 workers, that amounts to about 2000 per worker... about a weeks wage?
  - wyldfire 12y ago
    Who's eligible for the class? Only employees of those corporations? Or the tech/engineering marketplace at large?
    - Timothee 12y ago
      My understanding is that it's only people who were employees of these companies at the time, though it's easy to argue that anybody in the tech industry was indirectly affected. I.e. the salary paid to these employees influences the salary expected to be paid to people doing the same at a different company. Especially considering the size and importance of the companies involved. Strangely, I haven't seen this discussed much in articles about this scandal. (of course I say that as someone who did not work at any of the involved companies)
- colechristensen 12y ago
  The planet where $100m divided over 64,000 employees affected comes to ~$1500 per employee i.e. chump change. The planet where Google's yearly revenue is over $50bn and Apple is the most valuable company in the world.
smackfu 12y ago
When Judge Koh rejected the original settlement, she suggested that she expected a minimum settlement amount of $380 million, based on the previous settlements that had been done by other companies in this case. So the new amount probably does make a difference.
nksdnkvdnkdokmo 12y ago
The lesson for large companies to learn here is that you can get away with this kind of thing for a song. In order for this behavior not to happen again, the outcome needed to have been penalties around 3x what each company "saved" by depressing wages.
bradleyjg 12y ago
It seems fairly likely the judge will approve the settlement. First, one of the reasons the judge gave for rejecting the prior settlement was that it was lower per plaintiff than the class lawyers had negotiated with the defendants it had already settled with (Adobe et. al). That objection is now answered. Second, as you mention, judges very rarely reject settlement offers. That's in no small part because when they do, they are often overruled by appellate courts, and judges hate being overruled. As much as class actions lawsuits look like they create massive principle-agent problems to the rest of us, the federal courts are quite comfortable with them, and they have repeatedly applied the maxim that the law favors settlement in the class context. If there is to be class action reform it will have to come from Congress (the Class Action Fairness Act of 2005 was a tiny step in that direction).

billyhoffman 12y ago

It is a mistake to view the settlement through the lens of "$X paid per person." These companies colluded to depress the wages of an entire industry. "50,000" people were not effected. "64,000" people were not effected. Those numbers are just the work forces of the companies involved in the lawsuit. The entire greater Bay area technology job sector, one of the highest paid jobs in America, in the region of its highest concentration, was artificially depressed. These companies put a ceiling on what a given job was worth. If you work in Silicon valley in technology, you were effected. The ability to moved to another company and get paid what you are worth was effected. The shear scope and damage these companies did is almost beyond belief. We are not talking hundreds of millions of dollars. We are talking Billions and Billions. The ripple effects are even crazier. How many new technology companies did not get created because people's depressed salaries reduced how much they could save to bootstrap something new? How much did technology workers not spend into the service industry or the larger economy, because they were underpaid? This is a staggeringly insidious act with wide reaching repercussions beyond Adobe poaching some PhDs from Google, or vice versa.

ElijahLynn 12y ago
Another great contribution to society by Steve Jobs.
- billyhoffman 12y ago
  I know this is kind of a throw away poke at Steve Jobs, but its very believable as well. In fact, the selfishness that Jobs displayed repeatedly in his life helps you understand how this whole thing happened. I can totally see Steve Jobs says "damn it, I'm trying to make cool stuff and these 2-3 other companies get stealing my guys. Stop doing that so we can go back to making awesome stuff!" But that's the problem and my broader point. These companies acted to reduce churn of top talent and possibly secondarily to save some cash. I can see this seeming like a good idea. But the broader ramifications of their actions are insane.
  - sophacles 12y ago

kolbe 12y ago

Cost of a chat service company with 55 employees:.......................... $19,000,000,000 Cost of systematically colluding to depress the wages of employees:....... $415,000,000

deleted 12y ago
[deleted]
- krrrh 12y ago
  Your comment depends on the interpretation of the word 'free' in 'free market', and it's why many economists would argue that anti-cartel legislation that makes actions like this illegal is necessary to protect the free market. ie. A market can become less free through bad government regulation which limits competition, but it can also become less free through the collusion of some market participants in a trust which limits the ability of other participants to truck barter and trade.
- webXL 12y ago
  Not sure what point you're trying to a make. If the market were controlled, wages would have increased? Or there's a problem with that $19B price tag?
- icebraining 12y ago
  How did you let the market run free? There were regulations to prevent this. If anything, this is an example of their ineffectiveness.
  - 0xDOOD 12y ago
    Do regulations really exist to prevent crime, or to threaten punishment when it occurs? Arguably, neither a free market or a regulated market can prevent any criminal activity.
    - Retric 12y ago
      That's irrelevant; clearly some people change their behavior due to the risk of breaking the law. However, unenforced rules (ie driving 56mph in a 55mph zone) are generally ignored.

billpg 12y ago

"Poaching"? Do they see their employees as property or something?

canvia 12y ago
resources to be utilized as "efficiently" as will be tolerated

droopybuns 12y ago

I want to see executives in jail over this.

deleted 12y ago

[deleted]

dpark 12y ago
Pretty sure the lawyers are the ones proposing and accepting. The lawyers for the plaintiffs generally receive about 25% of the award. So while $6500 (actually more like $5000 after lawyer fees) is a small amount for each person in the class, $103 million is a lovely amount for the lawyers, so you can see why they'd accept the deal.
- gcb0 12y ago
  the class system should really limit it to some percentage of the whole award, not over 2x the individual damages.
  - kansface 12y ago
    Under your proposal, petit-torts would never be subject to class action suits since the lawyers would never make money.
    - gcb0 12y ago
      not sure what are petit-torts. but that is probably a good thing.
a3camero 12y ago
The key is that this is lawyer-driven not employee driven. Lawyers drive class actions and they typically get a (large) percentage of the settlement. Those 64000 employees won't have much of a say in this.
- deleted 12y ago
  [deleted]

smackfu 12y ago

Remember that it's a settlement to avoid a trial. The settlement amount is going to be somewhere in between $0 and the real damages, modified by the odds of winning the trial. Additionally, the lawyers in a class action have a real aversion to going to trial, since they are working on contingency and get nothing if it goes to trial and they lose. That should drive the settlement offer down too.

jacquesm 12y ago
It would seem then that that is an excellent reason to litigate this on your own rather than through a class action.
- deleted 12y ago
  [deleted]
smackfu 12y ago
Forgot to mention, you also have to make the distinction between actual damages and trial damages. We've seen in many cases that damages were not as high as requested, and then were lowered upon appeal.

dsugarman 12y ago

This is horrible timing with Immigration Reform. The incorrect argument that tech companies want reform to keep wages low is going to get a lot of fuel if they don't agree to a reasonable settlement soon. The long term effects of letting highly skilled immigrants in to join and start companies on the tech industry is an order of magnitude higher than paying a couple $b to right the wrong for Google and Apple.

yuhong 12y ago

I really hope Apple/Google will do admission of wrongdoing with an apology letter, as I suggested before.

presootto 12y ago
Exactly right. I'm still waiting for Eric Schmidt and the other Google execs involved in this to issue a public apology. What was Google's motto again? Don't be what? Disclaimer: I work for TAGA (The Arrogant Google Assholes)

afking 12y ago

Is this not Capitalism? Lowering costs. If your worth more then what you are getting paid, quit? Ask for a raise? Seems bad to expect companies to just drop fantastic paying jobs into your laps. Government regulation to increase wage prices, seems like communism.

ForHackernews 12y ago
No, capitalism is supposed to involve companies competing with one another (including competing for employee talent), not colluding with their nominal competitors. That's an oligopoly or cartel and it's a market failure similar to a monopoly.
- igonvalue 12y ago
  I agree with the spirit of what you're saying, but I think it's more accurate to call what you're describing a "free market" than "capitalism"; the latter does not in fact preclude market failures such as oligopolies/cartels.

chmartin 12y ago

The evidence is the email. A crime was committed. forget the settlement, the CEOs need to go to jail

walshemj 12y ago
just ban them from being director for 10 years - you have sacked yourself and all those options that haven't vested back to the company they go. Or start enforcing the fit and proper persons test for senior managers.

bluecalm 12y ago

There aren't many things you can do to make people worse off at that scale. It's 50-60k employees and hundred thousands more affected by this to some extent. I mean, if you rob a supermarket or a bank it's like a drop in the ocean damage comparing to what executives at Google and Apple did. Why aren't people involved prosecuted, jailed or at least permanently removed form any positions of power and/or influence ? Every time I read this emails it's my "I don't want to live in this world any longer moment". I mean some of those "I don't want to leave paper trail we can be sued over" people are still in prominent positions today.