Apple, Google to pay $324 million to settle conspiracy lawsuit

http://www.reuters.com/article/2014/04/25/us-apple-google-lawsuit-exclusive-idUSBREA3N28Z20140425

by abalone • 12 years ago

132 102 12 years ago

abalone4• 12 years ago

Now the question is, how much do people receive after the lawyers take their cut and it's divided up among 64K employees?

tigerente• 12 years ago

Typically lawyers get on the order of 30%, so about $3400 per employee.

raldi• 12 years ago

Plus more from other companies?

georgemcbay2• 12 years ago

And then that $3400 gets taxed as normal income so they are probably walking away with something close to $2k each.

beedogs2• 12 years ago

Settlement seems low. Looks like every company involved ended up saving quite a bit of money, after all is said and done, with this little salary racket they had going.

whoismua• 12 years ago

Dear Sergey, Larry, Tim Cook & Co, don't do this again or you'll pay tens of millions after saving hundreds of millions in salaries and benefit.

sneak• 12 years ago

It's like you missed the memo that notified everyone that huge corporations that directly or indirectly fund all of the government decision-makers have carte blanche in America!

Ygg22• 12 years ago

I'm pretty sure Google/Apple will find itself in a ditch it can't escape from (e.g. Microsoft ten years ago and now). Things like this makes new engineers think twice before working for them, additionally their size has already shown as a detriment to them.

001sky• 12 years ago

"They planned to ask for $3 billion in damages at trial, according to court filings. That could have tripled to $9 billion under antitrust law."

$0.03-0.10/dollar seems pretty cheap. were the odds really that low in court?

sitkack2• 12 years ago

No, but the lawyers for the class action suit probably wanted an easy windfall vs years of work so they pressured to end this early.

georgemcbay2• 12 years ago

Yeah, pretty terrible outcome. Lawyers get a huge chunk of money for relatively little effort, the actual plaintiffs get like a couple of thousand each, and the companies pay out an amount that is likely far less than the amount they saved by the illegal collusion and is also not sufficiently punitive to impact their future decisions to do similar things.

hga3• 12 years ago

The lawyers, who are fronting the money to pursue this, have to balance risk and reward.

Anything can happen when it's put before a jury, including a deadlock from one recalcitrant juror followed by a retrial. Getting to that point would be insanely expensive, likely years of discovery battles, deposition taking and all that (and Jobs, the apparent ringleader, is of course beyond mortal questioning and judgement).

Then, as noted, an appellate judge (although not necessarily after all the above played out, it's going to be expensive for the companies and they'd pursue it ASAP) could declare this case isn't a proper class action. And there are ways the trial judge could screw up on matters of law and get slapped down by the appellate court ... and that's the infamous 9th Circuit....

Then we get to damages: sure, you can ask for 3 billion, and that it be trebled to 9, but you aren't necessarily going to get that much, and big awards are often substantially decreased upon appeal.

lmg643• 12 years ago

do the individual plaintiffs have any say, in aggregate? surely there has to be a better way to pursue a class action than this.

a3n• 12 years ago

"Settlement seems low."

Apple, Google, Adobe and Intel in 2010 settled a U.S. Department of Justice probe by agreeing not to enter into such no-hire deals in the future. The four companies had since been fighting the civil antitrust class action.

This I think is actually the worst part, and all but guaranteed this settlement. "You guys were caught robbing banks. Don't do that again, 'K? Now get outta here."

Too bad a similar DOJ settlement wasn't available to Aaron Swartz. "Never make those documents publicly available again, K?"

e40• 12 years ago

Too bad a similar DOJ settlement wasn't available to Aaron Swartz.

Unfortunately, it is all too familiar that large corporations get off with a hand slap and individuals are punished or threatened with the full extent of the law. Seems backwards to me, because the harm that a large corporation can do is almost unbounded.

diestl2• 12 years ago

This will leave a bad taste in the mouth around these companies. Apple really sound like a disgusting corporation when you look behind their well orchestrated PR image.

rplnt• 12 years ago

So does Google.

skj• 12 years ago

Being a Google engineer is pretty nice.

simonh• 12 years ago

Just out of curiosity, why did you choose to call out Apple particularly?

diestl2• 12 years ago

They are the antithesis of what I believe a technology company should be. Everything is closed source, locked down and designed to make maximum profit at the expense of the customer/developer/artist.

sbuk• 12 years ago

There's always one...

nutjob2• 12 years ago

They got off lightly. What they really didn't want is for the truth about their repugnant behavior to come out. They broke the law so obviously, and have already essentially admitted it to the Justice Dept. I don't know why the lawyers didn't push for more.

x3c• 12 years ago

324M for 64000 employees in the class action lawsuit. That appears to be 5k per employee before legal fee which could be as high as 30% of the settlement. Hardly 2-3k for each employee, I think.

Very cheap for the companies. But at least a good precedent to discourage such practices in the future.

MichaelApproved• 12 years ago

Very cheap for the companies. But at least a good precedent to discourage such practices in the future.

These two sentences don't mix well with each other. Either it's cheap for companies and worth the expense or it's a good precedent that discourages these practices in the future.

Cheap doesn't discourage.

zwegner• 12 years ago

Very cheap for the companies. But at least a good precedent to discourage such practices in the future.

does not compute

tsotha• 12 years ago

No, it's probably not enough to discourage such practices. They almost certainly pocketed more than that as a result of their collusion - from a straight green-eyeshades perspective they ought to get together over a beer this weekend and hammer out a similar agreement.

malandrew• 12 years ago

Why in the world would those 64k employees take this offer? It was clear that they were going to pay for this and that a jury would be sympathetic. Was there really any chance that the amount gained could have be lower for the plaintiffs had this case gone to a jury trial? If not, then why didn't they go to trial?

abalone4• 12 years ago

It actually addresses this. The report explains that there's a chance the whole thing would have been invalidated by an appellate judge.

Still, personally as a class member I would've pressed for more, and I bet it's because the firm has different incentives. They probably stand to get something on the order of $100M of that settlement. They're thinking, $100M in the hand is worth $1B in the bush. Especially since going to trial explodes their costs.

But at the ~$3K level most class members stand to gain (on average), I bet most would bet that for a chance at $30K. I would. Sucks that the class members don't have a say.

brudgers2• 12 years ago

That's the reason for the lawyers to settle, A $100 million in fees will feed a family of four. There's no reason to be greedy about it.

marvin4• 12 years ago

I can't believe there's a 90% chance that the class action would be rejected. The companies got off ridiculously cheap. Yet another example of illegal behavior remaining very profitable even after legal action.

danielweber6• 12 years ago

Sucks that the class members don't have a say.

Class members can opt out of the settlement, and if enough do it (IANAL but one would probably know the magic number) the settlement doesn't hold.

There is heavy social pressure not to opt out, though. It would be very public. And actively participating in a lawsuit against an employer puts a black mark on your resume for any future employers. (Which as I pointed out elsewhere can be unfair: sometimes employees sue for bullshit reasons, and sometimes employees sue for incredibly legitimate reasons.)

rayiner• 12 years ago

First, the lawyers don't get to decide whether to settle, the lead plaintiffs do. Second, class members can opt-out of the settlement. As 'danielweber points out, nobody will do so because litigating against employers would be a huge black mark on their resume. That's the real kicker here.

As a general principle, I have serious concerns about the agency problems that exist in the class action system as currently structured. I think it's way too common for lead plaintiffs to settle for too little. However, in this case I think they and their lawyers did everyone a favor. Nobody would've pursued these cases individually, not even if they stood to get $30k. Every dollar the class plaintiffs recover above $0 is gravy.

brudgers2• 12 years ago

In response to the lawsuit Apple and Google have joined forces in an effort to reduce payments to tech workers. How did I not see that coming?

karterk• 12 years ago

The settlement will give 3-5K per employee. Hardly anything. I wonder why they settled, instead of going ahead with the trial. I'm totally unsympathetic with these companies, and now they are just getting away literally free.

yeukhon• 12 years ago

You can go on for years. The paper bill you own doesn't hold up its value. You can keep $1 in your pocket but five years from now it hardly actually worth $1. Furthermore, how much is fair? 300K per person? Some of them could have gotten a 50K bump by switching to a new employer. If anything, large sum large number of plaintiffs is usually one of the longest trials you will ever experience if neither side let it go. You can withdraw from the case and start your own lawsuit for more, I guess that can work in legal.

KaoruAoiShiho• 12 years ago

This is way too little. Disgusting.

danra• 12 years ago

I think the repercussions of this are wildly underestimated by Apple's and Google's management, and they are not doing nearly enough to prevent upcoming mass resignations of their engineers.

I'm just extrapolating from my own emotions on the issue. I'd previously thought very positively about going to work for Apple. Not so anymore. To me, the fact that Tim Cook's voice isn't clearly heard, completely rejecting this sort of practice, issuing a public apology on behalf of Apple, and ensuring to compensate employees by more than a few thousand dollars each - Is just too big of a de-motivator.

We need the CEOs to clearly voice their accountability, and their plans to prevent this from happening again, the sooner the better.

apsec112• 12 years ago

"Upcoming mass resignations"? This story has been in the news for nearly four years now. Anyone who sees it as a compelling reason to not work for Google or Apple is long gone.

zaroth• 12 years ago

Maybe the only bright side I see to this is, a red line has been drawn, a multi-million settlement is drawn out, and everyone knows if there is a next time the penalty would be even worse.

talmand3• 12 years ago

I would think the opposite. If this settlement goes through I would say that the cost of doing this type of business has been decided.

YPCrumble• 12 years ago

The moral of this story is that conspiracy is very profitable. Save ~$3bn in costs for a $300MM settlement. Sad.

michaelochurch3• 12 years ago

There's something Apple and Google and their ilk are much more afraid of than this lawsuit and, based on these shenanigans, it may be time.

I found out last March why my manager at Google was adverse to me. I knew someone was pulling strings on him and I had thought that he was taking orders related to my criticism of the G+ direction (in fact, the G+ executives were, as far as I know, innocent) but it was actually because an executive (who's since been disciplined) flagged me as a union risk. I said something to the effect of "decisions would be better if made on the floor" and that was taken to mean far more than I actually meant. (I was talking about G+ Games, not unionizing the Valley. Small difference.)

However, that ordeal and the career problems I've faced since then have convinced me that we need to unionize software development and the Valley ecosystem.

The Valley is fucking terrified of unions. So terrified that if you even seem like you might be leaning that way, executive-level people in major companies will go out of their way to fuck up your career. A lot of the back-channel reference checking that goes on in the Valley is to avoid taking on a potential unionist. No one cares if you were a mediocre performer 3 jobs ago. That stuff is there to black-list potential unionizers.

Now, do I think we want or need a factory-style union where promotions and pay are based on seniority? Hell no. That's a terrible idea. Engineers who work their asses off to become the best they can be, and to advance their respective fields, should be rewarded. I think that the top engineers would make more with a properly-designed union structure than they do now (since, currently, they top out at 1.5 times the pay of mediocre ones). I think our model needs to be more like the Hollywood unions (writers' and actors' guilds). Those do not curtail the financial upside for their members (there are still actors making millions per year) nor do they produce mediocrity. (Say what you want about Hollywood's product, but it's immensely commercially successful and the envy of the pop-culture world.)

Specific union protections we need include:

    * readily available legal support when faced with non-paying clients or bad-faith
      employers. 
    * recourse against clients and employers who use reputation threats to justify 
      nonpayment or bad behavior (i.e. "if you don't accept our unfunded scope creep, 
      we'll call other clients.")
    * (for employees) representation when in trouble with management. The right to 
      have a representative *in the room* (mostly, because if you negotiate on your
      own behalf, you're at risk of getting emotional and saying something
      stupid) when dealing with management or HR.
    * defense against negative references and back-channel reference checks in 
      general. 
    * transparency in compensation.
    * protection against "no-poach" lists and blacklists. A union tip line
      can help with that.
    * protection against sharing of individual HR data (salaries, 
      performance reviews) among companies, often used to keep pay down. 
    * negotiation of terms that are embarrassing for an individual to
      formally address, such as severance, health accommodations
      and workplace privacy.

These are all things that we can have, and that we deserve, that bring none of the negative side effects associated with unions.

marvin4• 12 years ago

The Norwegian laborers' organization movement, at least the way it worked 20 years ago, is a good model for software developers: Employees cooperating with employers to ensure that no one is exploited, that everyone keeps their skills up to date and that companies retain their competitive edge.

Hope I don't get in career trouble later for saying this (it is under pseudonym though), but I think that a suitable form of organization would be beneficial for software people. Lawsuits like this one are an excellent case in point. We just have to make sure we don't make the same mistakes that the traditional (and especially automotive) unions did.

kumbasha2• 12 years ago

Bingo. The mistakes to be learned from are many and well-documented in this scenario.

jrockway• 12 years ago

That stuff is there to black-list potential unionizers.

What stuff?

michaelochurch3• 12 years ago

Blacklists and shared salary databases. If you move from one big tech company to another, your new employer typically knows exactly what you make, because that data is often shared. Some HR departments will also (although it's never put in writing, for obvious reasons) assist future employers in finding back-channel references.

This is a very old game, and the original reason for employers to share all that data was to blacklist "troublemakers" who might unionize the workforce. Now, it's more often used to verify compensation (lest people lie and big themselves up) and enforce no-poach pacts, but it's every bit as unethical.

kumbasha2• 12 years ago

I suppose my first question is... Why doesn't this union already exist?

mseebach• 12 years ago

Occam's razor answer: Because the vast majority of Silicon Valley engineers are happy enough with their working conditions, with their ability to find new work if their current gig goes belly up and confident that if a major conflict occurs, they can find the help they need (eg. a lawyer) in the open market.

hahainternet3• 12 years ago

Michael, I have seen you comment here many times. I don't know you, and have never met you, but I feel it's hard to believe your stories.

Almost every time you comment, there's immediately a comment from an active Googler telling everyone how you see things in a completely different way.

For example, you casually mention here how you must be black listed because you have seen career problems since. Yet this is nothing to do with unions, and all about anti poaching agreements. I don't intend to slander you here, I just find it extremely hard to believe anything you say isn't delivered with an agenda.

michaelochurch3• 12 years ago

Almost every time you comment, there's immediately a comment from an active Googler telling everyone how you see things in a completely different way.

Google has almost 50,000 employees. Not all of them are intelligent, well-adjusted people.

For example, you casually mention here how you must be black listed because you have seen career problems since.

I don't think I'm "blacklisted". I've definitely caught inappropriate communications behind my back, to the point that I've had to pursue litigation and have collected a couple of (small) tortious interference settlements. "Blacklisted" implies inability to get jobs, and it hasn't been nearly that bad for me because I'm ostensibly good at what I do. I've just had to deal with annoyances, like inappropriate questions on job interviews.

Yet this is nothing to do with unions, and all about anti poaching agreements.

The original purpose of shared blacklists was to shut out union risks ("troublemakers"). No-poach agreements are a similar, illegal, collusion among employers who are supposed to be competing. There are also HR departments in tech companies who share salary and performance reviews down to the level of the individual, and that's also (if not illegal) extremely immoral. Three heads of the same beast (no-poach lists, blacklists, salary databases) but the infrastructure of collusion is the same.

I just find it extremely hard to believe anything you say isn't delivered with an agenda.

I'd like to fix technology. That's an agenda. What's wrong with having "an agenda"? The alternative would be not having one. I wouldn't post on this forum if I didn't care about the future of this industry.

sheepmullet2• 12 years ago

I find it easy to believe him. He posts using his real name. If he is lying then ....well Google has an army of lawyers. He is almost certainly telling what he believes is the truth.

In contrast all the active Google employees who follow him around are anon posters. Anon posters who never worked with Michael and are only repeating office gossip or pointing out differences in perspective.

Edit: Anon people sign up to hn simply to try and discredit MichaelOChurch by attacking his (admittedly a little rough around the edges) reputation. See shanterer's post below for evidence in this thread.

shanterer2• 12 years ago

your history of compulsive megaposting across google's internal message boards, your university's message boards, autoadmit, hackernews and several other sites indicates low mental stability and a paranoid mindset. it's not hard to believe that you really are a low productivity troublesome employee, and that this explain your lack of career success.

jfjdjrnfmfm2• 12 years ago

eric?

goblin892• 12 years ago

Wouldn't any person that eagerly argues for unionization (regardless of professional field) indeed appear to other professionals as odd, mental, or having a hidden agenda?

Naturally, if working in our field yields pretty good money to most of us—regardless of how fairly we are treated—then why unionize? surely that must be just some weirdo's twisted communist ideals or some competitor's money behind.

marvin4• 12 years ago

Please post using your full name if you are going to make direct personal attacks at a named individual. It's very hard to take comments like this seriously.

pjc50• 12 years ago

People thinking that the blacklist is paranoid: the UK had a construction industry blacklisting scandal for years ( http://www.bbc.co.uk/news/business-21155535 ) and it's still not been properly dealt with.

Anti-unionism is often as much about the authority as it is about saving money; the desire to retain arbitrary power over your employees and know you've given them the bad end of the deal, even if they're on a multi-hundred-thousand-dollar salary.

sitkack2• 12 years ago

Same thing with anti-healthcare, the company store wants to make sure you buy inhouse for your health needs. Less likely to walk if your health insurance is disconnected from your employment.

Food and shelter should only be supplied to the worker as condition of employment. Food should only be available through an FSO (food supply organization).

danielweber6• 12 years ago

You are describing a professional society, like doctors or lawyers have.

Also:

    * transparency in compensation.
    * protection against sharing of individual HR data (salaries, performance reviews) among companies, often used to keep pay down.

Those two things are in contradiction.

marvin4• 12 years ago

These points are not in contradiction. You can publish anonymized salary information which gives other professionals accurate information about their market value while at the same time protecting employees against abuses of power where individual HR data becomes available to third parties.

For example, Tekna, the Norwegian Technical and scientific professionals' society, publishes annual (anonymized) salary surveys which are categorized by percentile, length of work experience and public vs. private sector. A software developers' "union" could easily provide similar statistics, perhaps organized by specialty. What you need to publish for transparency is enough information to ensure that new employees don't get a raw deal, not individualized information.

kakuri• 12 years ago

http://michaelochurch.wordpress.com/2012/11/18/programmers-d...

eternalban• 12 years ago

Michael, I am convinced the way forward is to incorporate and (positively) subvert the system from within.

Pxtl• 12 years ago

So what is that, like $2k per employee per year of the conspiracy? Sounds like they've learned their lesson, and the lesson is "go ahead and do it again, nobody will stop you."

drawkbox• 12 years ago

Yes this is more like a fee or small tax on the bad behavior.

"Bob make sure to budget in 300m for the anti-poaching agreements and get those out to the teams and companies. Run it by the senators + lobbyists so we can get that paid and proceed. We don't want anyone that helped us helping themselves or anyone else in the future." -- said the feudal kings stopping engineers and innovation.

walid• 12 years ago

The CEOs should have gone to jail for this. They literally conspired against honest workers.

sigzero• 12 years ago

Well, at least one of the CEOs is dead.

igonvalue• 12 years ago

I'm very curious about this, and surprised that none of the media articles mention it: Does anybody know where these numbers (both the $324M settlement and the $9B asking price) come from in the first place? Presumably, the plaintiff has hired some experts who've come up with a model that estimates the wages stolen?

$324M ÷ 64,000 employees ÷ 3 comes out to $1,687.50 per employee, which seems very low. (The factor of 3 is to account for the treble damages alluded to in the Reuters article.)

Zelphyr3• 12 years ago

I'm really getting tired of the slaps on the wrist these giant corporations are getting for their bad behavior. A few years ago Verizon was fined something like $23 million for bilking their customers out of money. That is literally pocket change for a company that size. It didn't punish them one bit.

This is just continuing proof that there is no difference between corporations and the government. One writes the laws and the other passes them. Meanwhile We The People are getting fucked with our pants on.

dman2• 12 years ago

You do realize that you could start a corporation if you wanted to?

ajsharp• 12 years ago

You clearly missed the point here.

Zelphyr3• 12 years ago

Ok, lets say I do start a corporation. And I do all the right things and in 5-10 years its doing several hundred billion dollars in revenue. Not unheard of - Apple, Google, Facebook.

And lets further say that with all that cash I decide I need to get my own representation in government because its just not efficient to donate the max to my representatives in Congress. So I hire a lobbying firm and/or set up a PAC or two to pressure other representatives who otherwise wouldn't give me the time of day because I'm not a constituent.

Now I'm basically (and, in fact, outright) saying to them, "I gave you $x,xxx,xxx.xx in contributions[1] so I want you to pass these laws. I've written them for you so you don't really even need to spend time reading them. Aren't I a nice guy?" And so the representatives pass the laws because I gave them a lot of money and all they really want is the power anyway.

Then, because I'm so big, I inevitably do something stupid (at best) or criminal. So I call up the aforementioned paid-for representatives and tell them to get me out of the hot water. They put some pressure on the right people and, Bob's your uncle, I'm paying the equivalent to three or four hours revenue in "fines".

THIS. IS. WRONG!

If that's not clear enough lets look at it from my standpoint as a citizen (or, you know; and ACTUAL person):

I make an average of $45,000 a year and can only contribute $2600 per candidate[2]. In reality I'm only able to contribute a fraction of that and probably don't even do that much. But lets say I do something stupid and/or criminal. What happens to me then? I go to jail AND I pay an ACTUAL fine that is a significantly higher percentage of the income I just lost by going to jail.

The people you vote for in this next election need your vote. But they won't be representing you. Because you don't have enough money. Google does though. And so does Apple. And so does Hollywood, Big-Pharma, Oil & Gas... The list goes on of organizations who are more important to your government than you.

1: Bribes

2: http://www.fec.gov/pages/brochures/contriblimits.shtml

beedogs2• 12 years ago

lol.

anjc• 12 years ago

So does this mean that the problems will be addressed? Or is settling a way of avoiding this?

Apple, Google to pay $324 million to settle conspiracy lawsuit

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