I've been on both sides of that coin---I've worked for the startups and I've worked for "the industry." Am I being "taken advantage of?" Am I being paid less than I'm worth? Probably.
But I wouldn't trade the comfortable life of knowing my paycheck won't bounce for the hardscrabble life of the startup cowboy any day of the week.
I'm curious what your recommendation is. Is there a third option? Are you recommending people not work for the firms specifically involved in the settlement? I guess I could always look into IBM...
As for your third option, it's called self-employment. It demands that you fight for every scrip, scrap, and slice, but the reward is high: it's one of the best and only ways to get paid what you're truly worth.
It's not even about the amount of money lost/denied. It's about the principle of the thing - hence my comment about self-respect. Why would you work for one of the companies that engaged in this behavior when you have so many other options?
Diogenes, Aristippus, and Dionysus
A philosopher named Aristippus, who had quite willingly sucked up to Dionysus and won himself a spot at his court, saw Diogenes cooking lentils for a meal. "If you would only learn to compliment Dionysus, you wouldn't have to live on lentils."
Diogenes replied, "But if you would only learn to live on lentils, you wouldn't have to flatter Dionysus."
The question is which you like less (or prefer more): lentils or having to flatter.
And then you could get a counter-offer from your current employer. Nobody stopped this from happening, and a lot of engineers made a lot of money doing exactly this.
61. Third, each agreed that if either made an offer to such an employee of the other company, neither company would counteroffer above the initial offer. This third agreement was created with the intent and effect of eliminating "bidding wars," whereby an employee could use multiple rounds of bidding between Pixar and Lucasfilm to increase her total compensation.