U.S. judge approves $415M settlement in tech worker lawsuit | Hacker News Reader

U.S. judge approves $415M settlement in tech worker lawsuit

reuters.com

51 pointsevmar69 comments

This conspiracy is by far the most intentionally evil thing tech companies have ever been caught doing. Also the worst thing Steve Jobs did in his life.

Jobs was a scumbag through and through... just one more check mark on stupid shit rich business people and their respective corporations can get away with in America most of the time.

Even now it's a small sum for these companies, a few thousand dollars a person, much less than the actual pay lost due to corruption. A few billion each would've actually sent a message and actually set the victims whole.

Funny how the attorneys wanted to eat up almost 20% of the pie.

25% is a rather "normal" attorney fee award. You can argue they shouldn't get that much but remember that they have to eat the cost of prosecuting the case for a long time before seeing a dime.

EDIT: I don't get the harsh downvoting. I'm unfamiliar with the particulars of the case but remember that not all class-actions end favourably for the lawyers: https://en.wikipedia.org/wiki/A_Civil_Action

How much of a financial hit do they really take? Apart from their salaries and associated office costs (covered by past cases presumably) what other costs do they have?

Their only excuse is that most businesses do the same thing. Payment processors, freelance agencies, telecoms providers etc, all taking extortionate cuts in relation to the costs incurred providing a service, which comes from our paychecks.

Not all class-actions result in a settlement or a verdict and even then not all of them are rainmakers. Saw https://en.wikipedia.org/wiki/A_Civil_Action several years ago and it stuck with me.

"How much of a financial hit do they really take? Apart from their salaries and associated office costs (covered by past cases presumably) what other costs do they have?"

Well then, why don't you come work for me for a few years, and if the software you develop works well enough and I make a lot of money on it, I'll give you 25%. Deal? (PS you'll have to front your own computer, admin staff etc. too)

Don't forget research staff and your accountability to some very mis-temperamental validators that your 'work' is worthy of consideration.

I'm only partly ok with this analogy. It's true that the lawyers do a lot of work, and only might be paid, but there are some key differences here too.

Many viewed this as a slam-dunk victory, the only question was how much. At 25%, the lawyers were in a situation where by settling, they were virtually guaranteed a huge payday. As a result, many people feel that they didn't pursue this case rigorously enough, because they were extremely risk averse. This happens when the numbers get so big that you're comparing a guaranteed huge payout with the risk of losing a larger huge payout, but when both numbers are so high that the decision maker is far more concerned about a small possibility of losing the payout than the difference between the two numbers. Ie, y > x, but when x and y both cross a certain threshold, they may start to lose meaning when such a large chunk goes to the people in a position to settle. As I recall, the lawyers for the plaintiffs were actually scolded by the judge, who rejected the first settlement and told them to go back and fight harder for their clients, which is unusual.

Many people see this case as a slam dunk for an easy payoff. A better analogy might be that I convinced you to let me sell your house, and then sold it in five minutes for a huge commission, preferring a quick and guaranteed return for myself. I'd harm my reputation in the future, but if the payoff is big enough that I'm one and done, what does it matter to me?

Whatever the hit they take on cases like this, the returns also have to cover all the cases they take where they don't make any money.

I was involved in a small lawsuit over the sf rental market. We sued our landlord. That turns into over $45k in hard costs fronted by our lawyers if I remember correctly. Take depositions for example: even ignoring the cost of our lawyers in a room for a full day, there's a court recorder at $1k/day, a $300 transcript, proofing by us and our lawyers, lunches, travel, etc. Each of us did 1.5 to 2 days of depositions since each deposition is 8 hours on the clock but less in practice. Then there's things like process serving fees and filing fees ($1600 alone to request a jury trial).

Depositions from two of us, the landlord, his partner, a property inspector (and his inspection and report fee), a real estate valuation expert (including his fee to value the rental in the first place), and you'd be surprised how quickly this stuff adds up.

Now imagine suing billion dollar corporations with huge internal counsel with incentives to run the clock every step of the way to make it maximally expensive to sue them. And those companies have dozens of involved internal parties, many of whom may not even work there anymore, or who have travel costs, etc. And that's before you get to multiple $500+/hour expert economic valuation experts.

Lot's of "good" cases go sideways. This case could have easily gone that way. To prove causation and damages, you need economic models. The defense has their own experts with their own models showing that the attempted collusion as ineffective at actually suppressing salaries. If your jury buys that, you get $0, even if you have a notarized affidavit from a CEO saying he tried to suppress wages.

I love it.

"Sure, we tried to be evil, but we're incompetent at this one particular thing. We're totally competent at everything else we try, though, so certainly deserve our tremendous compensation!"

Actually, for contingency fees, 40% or 50% is not all that unusual.

Jobs was far from perfect. However, his contributions _far_ outweigh all his transgressions. The iPhone has (and will) ushered in an era of unimaginable prosperity for, in the coming years, literally the entire planet.

Whether or not his work could have been achieved without his faults is an open question. One which the counter factual isn't possible.

The key thing to remember is that there are no solutions, only trade offs. Jobs was an unedeniably overwhelmingly positive force on the world.

This has to be a troll ...

check his comment history, i doubt it.

Yeah, I'm so happy that Apple popularized the walled-garden approach to selling hardware and software. Now everybody is trying to get in on it and instead of owning my stuff and being able share it and run it wherever I want, I'm locked into Steve Jobs' money pit.

It also happened when he ran Pixar, he had agreement with Disney, Dreamwork, Sony, and Lucasfilm that they would not headhunt animators from each other.

Disowning his daughter was a decidedly dickish move, even if the damage was limited in numbers.

I'm still pissed at Google for falling into this. From a company that prides itself on not being evil, it was clearly an evil practice. I'm not too pissed though. I understand Steve had his distortion bubble and Larry had stars in his eyes. It's sad to see the integrity break down. It makes me not trust Google to always do the right thing because I don't trust Larry to.

>From a company that prides itself on not being evil

Does it, though?

Not for a few years at least. Now they're all "well...evil is kind of a relative term."

"Don't be evil" is just a slogan. Same as any other company's slogan. There isn't any integrity to begin with unless there's a market incentive for it, and there isn't.

I like to think they were just being sarcastic.

I feel like at first it probably was a very good slogan. The founders were interested in following through but as they got further and further form their employees the numbers just looked too nice.

This does not excuse they for being assholes but I can see how it happened.

It goes to show that for all the lofty dreams of Silicon Valley, technology, in the end, does not make the world kinder or fairer - just more convenient.

Surprisingly uninformative article!

If I recall correctly per-person damages are staggering $6500.

I'm not sure if I would call that number staggering. It was noted by one person who objected to the settlement that it amounted to only 10% of the estimated savings the companies reaped from the practice.

"savings" ... more like "ill-gotten gains from racketeering"

usually the government confiscates those and then sends the perps to jail over it.

Hard to do to a corporation.

usually the members of the syndicate go to jail, usually the syndicate is not tried as a whole.

Staggering? I'd call it a pittance. The companies should've been fined much more to make an example out of them so no tech firm attempts something like this again.

Pretty sure thats a sarcastic use of the word staggering

That's what it sounded like to me as well.

It's like getting caught stealing and you only have to payback the money you stole. Zero incentive to stop stealing.

Or like getting caught and having to pay back 1/10th of the money you stole.

This cartel had 4 members. With all the Silicon Valley tech companies, it's a little hard to see how this would be successful at holding down compensation.

In any case, cartels have a historical reputation of being unworkable without laws being passed to force conformance. The problem for the cartel members is they have large incentives to cheat on the agreement.

Probably the most famous cartel is OPEC. "Jeff Colgan argued in 2013 that, since 1982, countries cheated on their quotas 96% of the time, largely neutralizing the ability of OPEC to collectively influence prices."

https://en.wikipedia.org/wiki/OPEC

Cartels are dynamically unstable. That doesn't mean they can't cause a net social loss during the period in which they are effective.

I looked at some of the articles on this particular cartel. I didn't see evidence presented that employees of the cartel were compensated less than employees at other tech companies.

While there is no doubt there was an illegal cartel, I'm skeptical that it was an effective cartel.

It acted to suppress wages across the industry by reducing wage rises on moves.

Effectively its negativly skewing the salery distribution for every one - this is basic Stats 101.

Okay, but was compensation at cartel members actually lower than at other tech companies? And if they were, wouldn't that make cartel members vulnerable to poaching from non-members?

I just don't see how a cartel of 4 companies could possibly be effective across the tech industry.

The lawsuit is 8 companies, (Adobe, Apple, Google, Intel, Intuit, Pixar, Lucasfilm and eBay) but dozens of others were discussed in emails and memos.

Because big companies act to set the rate also read up on statistics and how distributions work.

I don't know about this cartel specifically. I'm making an economic point about cartels generally.

When this scheme came to light, google ended up giving their employees a 10% across the board raise. Further, google is often used as a compensation benchmark.

http://www.wsj.com/articles/SB100014240527487035236045756052...

   Nov 10 2010
   
   Moving to plug the defection of staff to competitors, Google Inc. is giving 
   a 10% raise to all of its 23,000 employees, according to people familiar 
   with the matter.

That's strong evidence the cartel was a failure.

The opposite. When they had to stop constraining wages, they were forced to give raises to their employees. That is the definition of success: from 2005 to most of 2010, they successfully underpaid.

Not successfully, because other companies paid more and were draining away Google's talent. I would also suspect that Google paid less not because of the cartel, but because of the stock options. Once the stock stopped rising dramatically, engineers would not have settled for less salary.

Microsoft went through a similar transition.

Creating a cartel is one thing, but making it work is quite another.

On termination of cartel agreement, they had to immediately boost wages. A cartel doesn't have to be 100% effective to be, nonetheless, effective. And they had just re-priced options in early 2009.

The article doesn't mention the cartel as being a factor, it mentions aggressive poaching by other companies.

Most companies base salaries on the "market rate." The rate is effectively set by the largest companies. So when the largest companies band together to keep the market rate down, it keeps them down across the entire industry. Even in other cites and states. Did some small companies pay more. Sure, but these smaller companies had a very limited number of openings. Many companies would claim to be not as big as google, so they would pay less.

Does anyone know how all that money will be distributed?

The lawsuits official information website has some information in the FAQ section about distributions.

http://www.hightechemployeelawsuit.com/

generally speaking if you are a part of the group a class action suit applies to you would have received a notice telling you about your rights. Even though the top line number seems big it probably boils down to like 2-3k per affected employee after fees and taxes.

Given the amounts involved likely as a single McDonalds meal voucher per recipient.

I commented on this a year ago or so: https://news.ycombinator.com/item?id=8154909

My opinion on this is unchanged and I'm still disturbed by the greed behind this lawsuit.

You may enjoy The Fallacy of Relative Privation - http://rationalwiki.org/wiki/Not_as_bad_as

"Look, none of you were actually murdered, so it's unfair of you to complain about the beating you received."

I'm also curious as to why the greed of the companies doesn't disturb you?

To everyone else - join, or form, a union.

I am more disturbed at the greed behind the original injustice. The tech companies should be punished, the greed of the plaintiffs is completely irrelevant.

Why is it greed if a walmart worker was being stiffed of a dollar an hour its just as bad as a sales guy losing 20% of a five figure bonus.

Walmart workers and stiffed tech workers have more in common than the "masters of the universe" who rule them both.

That's a reach. Minimum-wage workers live an order of magnitude differently than either of the others.

Yet both are still reliant upon their labor for their livelihood.

...for some definitions of the word 'labor'.

A difference is, working for minimum wage leaves you at risk of housing, food, health. Anyone who escapes the trap of too-poor-to-live inhabits a different world.

They still have much more in common than either do with tech billionaires or the land owners to whom they both pay half of their income to in rent.

There are laborers - minimum wagers and programmers alike - and there those who are parasitic on the labor of others - CEOs, landlords, financiers. That's the real American divide.

Not "scraping by" vs "not scraping by".

Philosophy aside, after your living is secure all the rest is imaginary points. It has to mean less than risk-of-death or living in poverty. Maybe not to a 20-something idealist; but definitely to a parent.

Even supposedly secure, well compensated tech workers can usually still count the number of paychecks away from poverty they are. While you can do that you're not really 'secure'.

Especially when you're paying $3,200 a month for the privilege of living in a city where they can earn the good money.

But we're still taught to sympathize with the Steve Jobs and Larry Pages than the McDonalds servers who can also count the number of paychecks away from destitution they are.

I agree. Let's take these imaginary points away from corporations. They're imaginary, they shouldn't care.

Basic Income! Agreed!

But they are still "employees" and still have issues at work.

>I'm still disturbed by the greed behind this lawsuit.

I'm disturbed that people are taking the billionaires' side in a wage fixing cartel on the principle that breaking the cartel is "greed".

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