Judge Rejects Silicon Valley Settlement

A California judge has rejected the proposed settlement in a lawsuit over no-hire agreements used by top Silicon Valley tech firms, saying the amount being offered to compensate workers is too low.

The remaining defendants in the case — Apple, Google, Intel and Adobe Systems — had reached a deal with the worker’s lawyers to settle the case for US$324.5 million, but Judge Lucy Koh of the federal district court in San Jose, California, said that amount is too low.

After subtracting the fees for the workers’ lawyers — they’re allowed to keep up to a quarter of the award, or $81 million, as well as other money — each worker would be left with an average of only $3,750.

“The Court finds the total settlement amount falls below the range of reasonableness,” Koh wrote in her order, issued Friday.

She said she was troubled that the workers would get less money than under a previous settlement with companies that settled earlier in the case, even though the case has been progressing in the workers’ favor since then.

Last year, Intuit, Lucasfilm and Pixar settled with the workers before the case came to trial.

All of the companies were accused of striking secret deals to not poach each others’ workers, a violation of the Sherman Antitrust Act that reduced the workers’ potential to earn higher wages.

An expert hired for the case has estimated that the workers’ should receive damages of $3 billion, for wages they could have earned if the no-hire agreements hadn’t been in place.

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Tech Hiring Up This Year

Hiring of technology professionals has been increasing since the first half of this year, with new IT hires accounting for about 10% of all the job growth in the U.S. in June, according to two independent assessments.

Total tech employment reached 4.47 million in June, an increase of 22,600 jobs from the prior month, or a .51% gain, according to TechServe Alliance, an IT services industry group which tracks employment data month-to-month. The total excludes tech manufacturing employment.

Similarly, Foote Partners, which researches IT employment trends, reported a gain of 18,200 new tech jobs last month.

These gains are coming at the same time that some tech employers are cutting jobs.

IBM has cut more than 3,000 workers over the past few weeks, struggling Hewlett-Packard is still eliminating jobs, and Symantec is seeing layoffs as well.

The U.S. economy added 195,000 jobs overall in June, according to the Labor Dept.

Foote said that IT employment in the first half of this year is averaging 13,500 new jobs per month.

“While the pace of job creation in the national labor force appears stuck at 7.6% unemployment and new jobs are heavily in part-time positions and low wage full-time segments, IT jobs have been on a sustained growth upswing and wages are holding steady if not growing slightly,” said David Foote, chief analyst, in a statement.

Reports on IT employment figures from analyst can differ widely depending on what U.S. labor department categories are use in the calculations.

Another firm that analyzes the labor market, Janco Associates, reported a gain of 9,900 jobs in June based on the categories it tracks.

Despite the increase in hiring, IT salaries remain flat, said Janco.

“Based on our interviews with over 96 CIOs in the last 30 days, we concluded that CIOs are not in a great hurry to hire new staff except to meet short term needs until they see a clear trend as to what is happening with the economy,” said Janco CEO Victor Janulaitis in a statement.

Janulaitis said that “67% of the CIOs we interviewed do not see any real push to expand staffing over the next 12 months.”

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