Judge shoots down settlement in Apple, Google hiring collusion case

Not so fast.

A federal judge on Friday rejected a proposed settlement in a case involving Apple Inc. and Google Inc. in which they were accused of secretly agreeing not to hire each others’ employees. The $324.5 million deal was part of a case that originally involved several of Silicon Valley’s biggest companies.

The settlement was reached in a case that had already proved deeply embarrassing to the tech companies involved.

As the case moved toward a trial, the companies were forced to disclose emails from such bigwigs as Apple’s Steve Jobs and Google’s former chief executive Eric Schmidt that seemed to indicate they secretly agreed not to poach rivals’ employees. Intel Corp. and Adobe Systems Inc. were also named in the lawsuit brought by former employees of the companies.

To thwart even more disclosures, the companies announced a settlement to avoid a trial last Spring. But on Friday, U.S. District Judge Lucy H. Koh declined to approve the deal, saying the payment was too low.

Koh noted that a separate settlement involving Intuit, Pixar and Lucasfilm required each company to pay more for their part in the hiring scheme than the settlement she was rejecting.

“The remaining defendants should, at a minimum, pay their fair share as compared to the settled defendants, who resolved their case with plaintiffs at a state of the litigation where defendants had much more leverage over plaintiffs,” Koh said today, according to Bloomberg.

The companies must now decide whether to renegotiate a new settlement or proceed to trial and hope any verdict falls short of the deal that Koh scuttled.

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