Top Class Actions
Reel, er Real, Life Conspiracy Theory. So who knew? It’s an interesting twist on antitrust. Siddharth Hariharan, a former software engineer at Lucasfilm and founder and CEO of InEarth, filed a class action lawsuit this week alleging that several of the nation’s leading high-tech companies violated antitrust laws by conspiring to fix the pay of their employees and entering into “No Solicitation” agreements with each other. That’s kind of like a union for employers… maybe.
Hariharan is looking for restitution for lost compensation and treble damages for the anti-competitive employment practices of Adobe Systems Inc. (ADBE), Apple Inc. (AAPL), Google Inc. (GOOG), Intel Corporation (INTC), Intuit Inc. (INTU), Lucasfilm Ltd. (creators of Thrillville, at left), and Pixar. No small request there.
But Hariharan points out, “My colleagues at Lucasfilm and I applied our skills, knowledge, and creativity to make the company an industry leader. It’s disappointing that, while we were working hard to make terrific products that resulted in enormous profits for Lucasfilm, senior executives of the company cut deals with other premiere high tech companies to eliminate competition and cap pay for skilled employees.”
The complaint contains quite a laundry list of allegations, specifically conspiracy among defendants consisting of (1) agreements not to actively recruit each other’s employees; (2) agreements to provide notification when making an offer to another’s employee (without the knowledge or consent of that employee); and (3) agreements to cap pay packages offered to prospective employees at the initial offer.
Short back story, “starting in 2005 with Lucasfilm and Pixar, and continuing until at least 2009 with all defendants, the companies entered into “No Solicitation” agreements with knowledge of the overall conspiracy and with the intent to reduce employee compensation. As additional companies joined the conspiracy, competition among participating companies for skilled labor decreased. Compensation of defendants’ employees was less than what would have prevailed in a properly functioning labor market where employers compete for workers.”
But this is more than just conspiracy theory—the complaint for damages follows an investigation in 2010 by the United States Department of Justice into similar misconduct by defendants. After that investigation was made public, the defendants agreed to end the anticompetitive agreements. However, no compensation was provided to employees of defendants. This class action was filed to seek lost pay for the employees who were targeted by defendants’ conspiracy. ‘Sorry’ doesn’t pay the mortgage, after all.
Top Settlements
Cooking with gas—to the tune of $40 million—the California Culinary Academy has reached a settlement of a class action lawsuit brought by students of the CAA over allegations of false advertising. Specifically, the suit charged that the school “misrepresented its 98 percent job placement rate, exaggerated its prestige in the industry and suggested that it had a selective qualifying process.” 98% job placement—in this market? Really?
While the settlement is pending approval, if its green lit, some 8,500 students who attended the CCA between 2003 and 2008 may be eligible for rebates of up to $20,000 each. (It didn’t cost me that much to learn to cook—wonder what I skipped?)
Plumb Deal, Finally? For all you who suffered plumbing woes thanks to Kitec, you will be interested to find out, if you don’t already know, that a preliminary settlement for both the US and Canada is in the works. In a joint announcement between the courts in the US and Canada this week, the parties concerned said they have entered into an agreement to settle class actions alleging that the Kitec Plumbing System manufactured by IPEX may be subject to premature failure and otherwise may not perform in accordance with the reasonable expectations of users.
The settlement relates to systems sold under various brand names, including Kitec, PlumbBetter, IPEX, AQUA, WARMRITE, Kitec XPA, AmbioComfort, XPA, KERR Controls and Plomberie Amelioree. The settlement covers class members throughout the U.S. and Canada.
Because this is a class action settlement, the agreement has been preliminarily approved by United States District Court Judge Royal Furgeson on April 29, 2011. Ontario Justice Terrence Patterson and Quebec Justice Jean-Francois Émond will consider preliminary approval in May 2011.
The settlement agreement provides a Settlement Fund and Claims Process for those who file claims related to any structures they own, have owned, lease, or have leased that contain a Kitec System. The amount paid per claimant depends upon the type and extent of any possible failure, the size and type of Kitec System and its installation, and the available funds in the Settlement Fund.
FYI—you can find out who to contact to get more information on this—in the US and Canada—by reading our post on the Ipex Kitec settlement.
And that’s it for this week. See you at the bar.