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California tech companies avoid antitrust trial with settlement

An approaching April jury trial date was avoided for California technology giants like Apple, Inc., Google Inc., Intel Corp. and others that had been accused by workers of conspiring to not hire each others' employees. Many observers had felt that this tactic violated antitrust regulations. The case that began in U.S. District Court in San Jose, California in 2011 had exposed many company emails that the judge considered to substantially prove the plaintiffs' case.

One email between the late Steve Jobs of Apple and Eric Schmidt of Google revealed that the then Google chairman assured Jobs that a Google recruiter who had contacted an Apple employee would be terminated immediately. With such evidence, a jury trial might have potentially cost the companies approximately $9 billion in damages for violating antitrust laws.

Instead the judge presiding over the matter in the U.S. District Court for the Northern District of California has initially approved a settlement totaling $415 million. The attorneys for the plaintiffs said they would collect 19.5 percent of the settlement and distribute the rest to the approximately 64,000 workers who are covered by it, with the average payout expected to be slightly more than $5,000. There was no immediate comment from attorneys for the defendants.

Cases like this illustrate the financial risks businesses can face when threatened by lawsuits. Business owners and managers often obtain the advice of attorneys in order to attempt to avoid possible litigation or control the costs when lawsuits do arise. An attorney could assist a business with many legal issues such as drafting and reviewing contracts and negotiating settlements that spare a business from lengthy and costly litigation.

Source: Bloomberg Business, "Apple-Google $415 Million No-Poaching Accord Wins Approval", Joel Rosenblatt, March 2, 2015

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