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Reports US

US stock market daily report (April 25, 2014, Friday)

April 27, 2014, Sunday, 19:04 GMT | 15:04 EST | 23:34 IST | 02:04 SGT
Contributed by Millennium Traders

Adobe Systems Inc. (ADBE-Nasdaq), Apple Inc. (AAPL-Nasdaq), Google Inc. (GOOG-Nasdaq) and Intel Corporation (INTC-Nasdaq) have agreed to a settlement of $324 million for a class action lawsuit by tech workers who accused the tech giants of conspiring to hold down salaries in Silicon Valley. The settlement was announced just weeks ahead of the high profile trial scheduled in court. In a statement from an attorney for the plaintiffs, Kelly Dermody of Lieff Cabraser Heimann & Bernstein, called the deal "an excellent resolution." Any settlement must be approved by U.S. District Judge Lucy Koh in San Jose, California. According to a court filing on Thursday, the plaintiffs and the tech giants will disclose principal terms of the settlement by May 27 although it remains unclear as to whether the ruling will spell out how much each company must pay.

Per court document, the group participating in the class action suit was going for $3 billion in damages at trial. Under antitrust law, the settlement could have tripled to $9 billion. The class action was initiated in 2011 against the tech giants who allegedly conspired, to avert a salary war. The trial was scheduled to begin at the end of May on behalf of nearly 64,000 Silicon Valley workers.

Adobe, Apple, Google and Intel previously settled a U.S. Department of Justice probe by agreeing not to enter into such no-hire deals in the future.

The case was largely based on emails in which Apple's late co-founder Steve Jobs, former Google CEO Eric Schmidt and several Silicon Valley rivals concocted plans to avoid poaching each other's prized engineers.

According to one email exchange in the court documents between Schmidt and Jobs, when a Google recruiter solicited an Apple employee, Schmidt told Jobs that the recruiter would be fired. Jobs then forwarded Schmidt's note to a top Apple human resources executive with a smiley face.

Another email exchange in the court documents between Schmidt and Human Resources Director at Google was an inquiry about sharing its no-cold call agreements with competitors. Schmidt advised discretion and responded that he preferred it be shared verbally, "since I don't want to create a paper trail over which we can be sued later", and the HRD agreed.

While the tech giants acknowledged entering into no-hire agreements, they disputed the allegation of conspiracy to drive down wages and argued that the employees should not be allowed to sue as a group.

A representative from Adobe said that the company denies it engaged in any wrongdoing, but settled "in order to avoid the uncertainties, cost and distraction of litigation."

Not all Silicon Valley companies agree to enter no-hire agreements. For instance, Sheryl Sandberg, Chief Operating Officer for Facebook, Inc. (FB-Nasdaq) declined an agreement in 2008 from Google where they would refrain from poaching each other's employees.

At one point, Apple's Jobs threatened Palm with a patent lawsuit if Palm didn't agree to stop soliciting Apple employees. Then Palm Chief Executive Edward Colligan told Jobs that the plan was "likely illegal," and that Palm was not "intimidated" by the threat.