Judge: $324M Settlement In Silicon Valley Tech Worker Case Not Enough

itwbennett writes: "A proposed $324.5 million settlement of claims that Silicon Valley companies (Adobe, Apple, Google, and Intel) suppressed worker wages by agreeing not to hire each others' employees may not be high enough, a judge signaled on Thursday. Judge Lucy Koh didn't say whether she would approve the settlement, but she did say in court that she was worried about whether that amount was fair to the roughly 64,000 technology workers represented in the case. Throughout Thursday's hearing, she questioned not just the amount but the logic behind the settlement as presented by lawyers for both the plaintiffs and the defendants."

Comments

Misleading summary

[i kan reed]

All the judge did, was ask whether historical fines to other companies are an appropriate precedent for Apple, Google, and the rest. This isn't "questioning the amount and logic" but regular old due diligence.

Re:Misleading summary

[Anonymous Coward]

If you're not aware of this, then know this:

(like most media outlets) Slashdot is pretty fucking corrupt. I've seen countless cases where people submit great articles, then a friend of the editors submits the same thing but pure garbage by comparison and it flies up almost instantly.

It makes some sense since knowing the submitter helps them do a quicker assessment of the value of the story, but in the end, it leads to a really shitty environment that discourages contributions.

Factor in the stupid not-appropriate-for-Slashdot stories they run and you'll see why this place is turning to shit and losing relevance quickly.

Re:Misleading summary

[Walking The Walk]

It isn't as if another version was already submitted earlier, perhaps with a better summary for the editors to use:

http://slashdot.org/submission...

The accepted story was submitted by itwbennett, and links to a story on itworld.com. I think it's a fair assumption that it was submitted by Amy Bennett, ITworld's Managing Editor. According to her achievements, she's had 2^9 submissions accepted, from which we can conclude that Slashdot editors probably prioritize her submissions. I imagine her submissions are fairly well written, link to a somewhat reputable source, and have already been deemed interesting enough to the IT crowd for a story on ITworld. So they get fast-tracked, and other worthy submissions are reviewed later, deemed to be duplicates, and discarded.

Would be nice if her submissions lead off with the fact that she was the managing editor for ITworld though, just to make it clear that she's just trying to feed traffic to her own site. (Which is a valid action if the story is original and interesting, but should require a disclaimer.)

More

[sycodon]

The point of "punitive damages" is to punish the company...duh. But, how do you do that?

Just taking their money isn't enough, especially in the case of these companies. You can take astronomical amounts and it would be a drop in the bucket to them. What is $400 million to a company with billions in cash?

What you need to do is hurt them bad enough to affect their stock price. Then everyone takes notice. Board members have their positions threatened, when that happens, executives are fired, etc. THAT'S punishment.

Re:More

[sexconker]

The point of "punitive damages" is to punish the company...duh. But, how do you do that?

Just taking their money isn't enough, especially in the case of these companies. You can take astronomical amounts and it would be a drop in the bucket to them. What is $400 million to a company with billions in cash?

What you need to do is hurt them bad enough to affect their stock price. Then everyone takes notice. Board members have their positions threatened, when that happens, executives are fired, etc. THAT'S punishment.

Round up everyone in the company involved in the decision, freeze their assets, throw them in jail pending their criminal case, hold a trial, and imprison them further upon their inevitable conviction, then liquidate their assets and distribute to the affected parties. Oh wait, that would be justice.

Re:More

[paiute]

Round up everyone in the company involved in the decision, freeze their assets, throw them in jail pending their criminal case, hold a trial, and imprison them further upon their inevitable conviction, then liquidate their assets and distribute to the affected parties. Oh wait, that would be justice.

Put the Duke brothers' seats on the exchange up for sale at once. Seize all assets of Duke & Duke Commodities Brokers, as well as all personal holdings of Randolph and Mortimer Duke.

Re:More

[Hevel-Varik]

It was the Dukes?

Re:More

[Yebyen]

I actually recognized this as Trading Places :D a movie that came out before I was born

Re:More

[Cabriel]

Given that $324 million for 64 000 employees means just a hair over $5000 per person, I'd have to say the judgement should have been closer to $3 Billion. Or, if you really want to talk punitive, $32 Billion.

Re:More

[timeOday]

Too much money and power are in on the take. Apple is worth about 12% of the entire Nasdaq, so Apple + google is about 20% of the whole enchilada. In my Fidelity-managed 401K index fund, for example (that is, basically my life's savings), Apple is my #1 holding, right above Exxon, Google, and Microsoft. So 2 of those 4 would be directly impacted, and Microsoft would no doubt feel some fallout (through rising salaries for their talent).

In a true democracy this argument should not bear much weight, since MOST (over 50%) of all stock is owned by only 1% of citizens. Most of us have a tiny slice, and I (for example) would benefit much more from higher wages in the tech sector than from a little more growth in my 401K. But in general, we small-potatoes shareholders (that is, almost all shareholders) are too short-sighted to take a hit now for the long-term economy.

More ominously, real influence is proportional to the wealth of a group rather than how many people are in it. Even if you convinced the bottom 99% of voters, you would still only have a minority of shares.

The reason I dwell on this is because I think the same logic, exactly, explains why the bank bailout occurred and the implosion of Wall Street had no real corrective result on the US economy or the distribution of wealth.

Re:More

[SydShamino]

There is nothing that civil law can do that is punitive to the managers. They didn't do anything; the company did things, and they are merely one of the louder of the company's schizophrenic voices. To get at them where it matters (their wallet), you'd have to go after company assets and hope it indirectly affects them as the parent suggests.

Only criminal law could pierce that veil and go after them directly, and while that can be quite punitive, it's not bloody likely.

Re:More

[afidel]

Well, you have to figure the wage suppression was worth significantly more than $5,000 per worker, heck it was probably worth between 2 and 4 times that per year and the case involves at least a half decade of bad actions, so make it 10k per worker per year and that works out to ~3.2B. It's certainly not going to bankrupt these companies but it will affect their quarterly results which might be enough to get folks attention.

Re:More

[whoever57]

Well, you have to figure the wage suppression was worth significantly more than $5,000 per worker, heck it was probably worth between 2 and 4 times that per year and the case involves at least a half decade of bad actions, so make it 10k per worker per year and that works out to ~3.2B.

In this case, I believe that the lawyers are putting their interests above that of the clients. An average person in the class is making well over $100k. For that person, which is better: $5k guaranteed or a 25% chance of $50k? Obviously the latter. However, for the lawyers, the question is rather different. Get guaranteed $Millions now, or spend a lot more time and effort to get a $25% chance of $multi-millions? Most people would probably opt for the $Millions and that's what these lawyers are doing -- grab the easy guaranteed money and move on to the next class action.

Re:More

[Swave An deBwoner]

Exactly my thinking also. The multimillion dollar legal fees are the driving force and as usual in class actions, the class members get peanuts (not to defame actual peanuts, they are quite nourishing).

Or the plaintiffs' lawyers already received a "pre-settlement bonus" from the defendant companies' petty cash boxes.

Either way, the plaintiffs got screwed.

Surprise

[hondo77]

The proposed settlement mainly benefits the lawyers and not the people damaged. What a surprise.

Accurate summary

[Piata]

She questioned the amount, the logic behind the amount and why the plaintiff's lawyers didn't feel a jury would find the emails a convincing argument for collusion. Not sure how you didn't find the summary accurate. I know it's a rarity on slashdot but this one is pretty spot on.

That settlement figure is a scam...

[Anonymous Coward]

That's about $5000 per employee, much less than the costs to the businesses otherwise.

Try $6.5 billion...then they will think twice about this crap.

Re:$507.03

[Etherwalk]

$324.5 million / 64000 workers = $507.03

These tech workers are getting fuck either way.

$5070. It almost certainly isn't enough to make the engineers whole, but it is more than nothing and not completely unrespectable. (They didn't lose their entire salary, but did lose some money.)

It is a *settlement* proposal, though. It's not supposed to be enough to make them whole--just more reasonable for both sides than fighting.

Re:$507.03

[Major Ralph]

Missed a decimal place there buddy, it's $5070.31

Re:$507.03

[mikael]

Something significant would be a decades worth of pay-rises for each employee affected.

That would be $10,000 x 10 x 64000 = $6.4 billion

It can never be fair

[ChrisKnight]

The actions of this cabal of companies has had a lasting effect on everyone working the tech sector. The normal cycle of hiring employees out of their existing position with an offer of more money helps to drive the average salary for a position up. Years of refusing do to that caused average salaries to stagnate. When I was offered a position at Apple in 2007 I scoffed at the rate I was offered, and I was told that Apple prided themselves in paying industry median salaries. What they neglected to mention was that they were actively working to keep the industry median down. I never took the position at Apple, and am not eligible in the suit; but that doesn't mean I wasn't affected. Many companies gauge offer salaries and raises against industry salary reports like those generated by Glass Door and other wage survey groups. Because some of the biggest employers in tech were working to keep wages down, and their rates significantly contributed to those salary reports, they effectively kept an entire employment sector's wages low.

How do you compensate for that? You can't. No court settlement will make up for the damage caused by this.

Re:It can never be fair

[joe_frisch]

Shouldn't this be a case of criminal collusion? At the very least it seems punitive damages are appropriate, and those could far exceed the nominal damage done.

Holy shit, seriously?

[bluefoxlucid]

Lucy Koh is still a judge?! My god, our legal system is a shithole.

Re:Holy shit, seriously?

[bluefoxlucid]

I remember her consistently applying judiciary favoritism, e.g. allowing a plaintiff to introduce late evidence all the damn time but denying defense evidence because it wasn't declared in discovery.

Not after the lawyers get their cut!

[Irate Engineer]

You're assuming that entire settlement goes to the plaintiffs. The lawyers will get several 10s of millions of that first.

$5000 per worker before lawyers fees?

[sjbe]

So that settlement works out to roughly $5000 per worker before lawyer's fees, which are sure to be substantial. Sounds a bit light to me, especially given the amount of cash the relevant companies have in the bank.

$2500 apiece after the lawyers?

[Chas]

Basically 324.5 mil, divided by 64,000 people comes out to $5070.31.
The lawyers involved will probably get at least half. So these tech workers' compensation works out to a measly $2500 or so?
These companies made BILLIONS. And these workers were denied opportunities to advance their careers that could have worked out to SIGNIFICANTLY more than $2500. Hell, that's a fricking Christmas bonus.

Justice?

[Moof123]

The settlement is weak. Nobody responsible is going to jail. The theme just repeats itself. Those in power can either drag things out so long, or be claimed to be too "big to prosecute" by Eric Placeholder's DOJ (bought and paid for by corporate sponsors, funny that...) and never have any real punishment brought on them of consequence.

If the precedent goes on too long where too many angry screwed peons do not have any sense of justice, you may see vigilantism kick in. Screwed workers who feel they have little left to lose might start going postal after realizing that their American Dream is just such a farce.

Punishment? What punishment?

[Anonymous Coward]

Let's play with financial data for a moment, shall we?

Revenue in FY2013:
Google: $59.8B
Apple: $170.9B
Intel: $52.7B
Adobe: $4B
Total: $287.4B
Settlement: $0.324B (0.11% of yearly revenue)

Median US household income: ~$52K
0.11% of that: ~$57

So, this is the equivalent of a regular Joe breaking the law for 7 years and, when caught, being fined $57.

Is this a deterrent or an encouragement?

It's a compromise. Not punitive.

[sjbe]

Does anyone know if if the settlement is supposed to in any way be punitive?

Settlements are almost by definition not punitive. It's an agreement between the two parties. The defendant gives less than what might happen if there was an actual ruling by a judge/jury. The plaintiff takes a certain but lesser amount rather than taking an all or nothing risk with a ruling.

the same companies

[poached]

are also heavy users of H1-B visas which also depress wages. I say fuck them all. But I don't know how to actually go about fucking them over.

Re:What would Justice look like?

[RavenLrD20k]

Them's the breaks. When shit like this starts sending quakes through the portfolios of the general population *MAYBE* it'll be enough to wake up the collective to say "Hey! What the Fuck?!" and break apart some of this complacency iceberg we have going on.