Pixar, Lucasfilm said to settle employee no-poaching lawsuit

The two companies are said to have arrived at a settlement with a proposed technical class of employees

Pixar and Lucasfilm have settled a lawsuit by workers alleging an illegal cartel formed by seven technology companies including Apple, Google and Intel, lawyers have informed the court.

The class counsels have informed the court in a letter that a settlement was reached, Judge Lucy Koh of U.S. District Court for the Northern District of California, San Jose division wrote in an order on Sunday.

Details of the settlement were not mentioned. The parties expect completing documentation of the proposed settlement and will submit it for court approval "in the near future," according to the letter to the judge on Friday.

Five engineers alleged in the lawsuit, individually and on behalf of a class of all those similarly situated, that Adobe Systems, Apple, Google, Intel, Intuit, Lucasfilm and Pixar, all high-tech companies with principal place of business in the San Francisco-Silicon Valley area of California, were involved in an "overarching conspiracy" to fix and suppress employee compensation. The companies are alleged to have restricted employee mobility by setting up "Do Not Call" lists and putting each firm's employees off-limits to the other companies.

The companies had settled in an investigation by the Department of Justice into the practices, without admitting any wrongdoing, but agreed not to ban cold calling and not to enter into any deals that prevent competition for employees. However, the employees have held that the victims of the conspiracy were not adequately compensated by the agreement with the government.

One of the highlights of the lawsuit was a written affidavit by former president and CEO of Palm, Edward Colligan, that former Apple CEO Steve Jobs threatened Palm with a patent lawsuit if it did not enter into an agreement in which the companies pledged not to hire employees from each other.

The current settlement with Pixar and Lucasfilm is with a proposed technical class of employees.

The two companies could not be immediately reached for comment.

The court declined to certify the lawsuit as class action in April, but Judge Koh said she may review her decision, after giving the software engineers leave to amend their petition in the light of new information.

The engineers have stated in a supplemental motion that though the evidence supports certification of either a class of all-salaried employees or a class of technical, creative, and research and development employees, there is powerful evidence that the no-cold calling agreements at issue in the case were designed substantially to disrupt recruiting of technical class employees. The plaintiffs had earlier proposed the two classes.

In view of the proposed Pixar and Lucasfilm settlements and others that may be noticed by July 19, Judge Koh has asked each side to submit briefs on how the settlements will impact the supplemental motion for class certification scheduled for hearing on Aug. 8.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

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