United States: Settlement Reached in High-Tech Employees Non-Solicitation Cases

On Jan. 15, 2015, plaintiffs filed a motion for preliminary approval of a $415 million settlement for claims brought by employees of Silicon Valley technology companies alleging that the defendants had entered into agreements not to solicit each other’s employees. In re: High Tech Emp. Antitrust Litig., No. 5:11-cv-02509-LHK (N.D. Cal. Jan. 15, 2015), Dkt No. 1032. The class settlement amount of $415 million is an increase of $90.5 million over the original $324.5 million settlement that Judge Lucy Koh had rejected as being insufficient. In re: High Tech Emp. Antitrust Litig., 2014 U.S. Dist. LEXIS 110064 (N.D. Cal. Aug. 8, 2014).

Plaintiffs filed complaints against certain high-tech companies, and in October 2013 the court granted class certification as to a narrowed class of employees. In March 2014, the court denied the defendants’ summary judgment motion. Shortly before the trial was set to begin, the parties informed the court that they had reached a settlement. Plaintiffs filed a motion for preliminary approval of a settlement totaling $324.5 million, and one class member objected to the settlement.

On Aug. 8, 2014, the court denied the motion for preliminary approval based on several considerations. The court concluded that the amount of the settlement was proportionally less than prior settlements, particularly in light of the fact that the settlement was reached after plaintiffs had succeeded in obtaining class certification. The court discounted the conceded weaknesses in plaintiffs’ case. The court denied the motion for preliminary approval and set a new trial date for April 9, 2015. The 9th U.S. Circuit Court of Appeals subsequently denied the defendants’ Rule 23(f) petition to review the district court’s order. Plaintiffs and defendants engaged in settlement discussions, and the motion for preliminary approval for a settlement of $415 million was filed on Jan. 15, 2015. The final approval hearing is set for March 2, 2015.

The motion for preliminary approval is available here, and the settlement agreement is available here.