By Dan Levine SAN FRANCISCO (Reuters) - Four Silicon Valley companies including Apple and Google failed to persuade a U.S. judge to sign off on a $324.5 million settlement to resolve a lawsuit by tech workers, who accused the firms of conspiring to avoid poaching each other's employees.
In a ruling on Friday, U.S. District Judge Lucy Koh in San Jose, California, said the class action settlement was too low, given the strength of the case against the companies. Intel and Adobe were also part of the proposed deal.
There is "substantial and compelling evidence" that late Apple co-founder Steve Jobs "was a, if not the, central figure in the alleged conspiracy," Koh wrote.
Representatives for Apple and Google declined to comment on Friday. Representatives for the other companies and lawyers for the workers were not immediately available for comment.
In their 2011 lawsuit, the tech employees said the conspiracy had limited their job mobility and, as a result, kept a lid on salaries. The case has been closely watched because of the possibility of big damages being awarded and for the opportunity to peek into the world of some of America's elite tech firms.
The case was based largely on emails in which Apple's Jobs, former Google Chief Executive Officer Eric Schmidt and some of their Silicon Valley rivals hatched plans to avoid poaching each other's prized engineers.
In one email exchange after a Google recruiter solicited an Apple employee, Schmidt told Jobs that the recruiter would be fired, court documents show. Jobs then forwarded Schmidt's note to a top Apple human resources executive with a smiley face.
The four companies agreed to settle with the workers in April shortly before trial. The plaintiffs had planned to ask for about $3 billion in damages at trial, which could have tripled to $9 billion under antitrust law.
Plaintiff attorneys argued Koh should approve the deal because the workers faced serious risks on appeal had the case gone forward. Some tech workers filed objections to the settlement, however, saying both sides should go back to the negotiating table in the hopes of obtaining a larger amount.
In her ruling, Koh wrote repeatedly referred to a related settlement last year involving Disney and Intuit. Apple and Google workers got proportionally less in the latest deal compared to the one involving Disney, Koh wrote, even though plaintiff lawyers have "much more leverage" now than they did a year ago.
To match the earlier settlement, the latest deal "would need to total at least $380 million," Koh wrote. The judge scheduled a further hearing in the case for Sept. 10.
The case is In Re: High-Tech Employee Antitrust Litigation, U.S. District Court, Northern District of California 11-cv-2509.
(Additional reporting by Noel Randewich; Editing by Paul Simao and Grant McCool)