Companies Settle Employee 'No-Poach' Case for $20 Million
Intuit Inc., Lucasfilm and Pixar will pay a total of $20 million to settle a class action on behalf of former employees who claim the companies illegally suppressed salaries by striking pacts with other high-tech businesses not to raid each other's ranks.
Plaintiffs lawyers asked the court on Saturday to grant preliminary approval of the settlements and certify a settlement class of former employees who did technical or creative work or handled research and development. Walt Disney Co. subsidiaries Lucasfilm and Pixar will pay $9 million in cash, and Intuit will shell out $11 million, according to the settlement motion.
The deals, first reached in July, would wipe away all claims against the three companies, but substantial litigation remains in the San Jose federal district court litigation. The plaintiffs, who accuse the companies of a conspiracy to constrain employee compensation by reducing competition for labor, will be moving forward against Adobe, Apple, Google and Intel. According to the settlement filing, Intuit, Lucasfilm and Pixar employees make up less than 8 percent of the proposed class, suggesting the final award to class members if plaintiffs prevail could top $200 million.
Lead plaintiffs lawyers at Lieff Cabraser Heimann & Bernstein and the Joseph Saveri Law Firm plan to request that nearly $5 million of the settlement fund be set aside for incurred and future litigation costs, according to the filing.
U.S. District Judge Lucy Koh dealt a blow to plaintiffs in April when she declined to certify a class of roughly 60,000 former employees. However, Koh seemed more open to certifying a class that would be limited to salaried, high-skilled workers at a hearing in August.
The seven defendants' recruitment and employment practices were first scrutinized by the U.S. Department of Justice, which filed suit in 2010 alleging that the companies struck agreements that restricted the mobility of skilled employees. The companies settled with the government, but civil suits followed.