Google, Apple, Intel and Adobe have agreed to a $324 million settlement in response to a suit brought by employees of the firms who were financially impacted by their agreements to not hire from each other. That action suppressed the wages of their staff.
The $324 million figure is paltry and an embarrassment.
Interesting to this case is how blatant the companies were in engaging in behavior that was contrary to the interests of their employees — in an industry famous for coddling its workers with perks and rides and the like, there is ironic dissonance here. Facebook, notably, refused to take part in the scheme.
The tab could have run as high as $9 billion. The New York Times wrote about that sum, including a paragraph that I think is worth revisiting:
The companies privately scoff at the $9 billion figure that the plaintiffs are seeking, contending it amounts to extortion. The employees, who number about 100,000, suggest that the facts are so damning against the companies — and so embarrassing — that they won’t settle for anything less than a blindingly high number.
It turns out that the employees were willing to settle after all. I find it annoying that companies that were content to harm the interests of their constituent members felt they had the moral standing to “scoff” at the proposed amount.
$9 billion is a hard amount to contextualize. For perspective, I calculated before the most recent earnings season (using December 31st, 2013 data for the most part) that the four firms had a total of $242.844 billion in cash, short-term investments, and long-term investments.
That’s enough to have paid the then potential maximum $9 billion in fines nearly 27 times. The companies could — again using the $243 billion figure — afford to pay the $324 million settlement 750 times. The four firms are now only another quarter richer.
The price for unfair collusion, and market distortion that harmed their workers’ ability to derive the fair price for their labor is 3.2 percent of one quarter of Apple’s net income. So in effect there is no punishment here.
With 64,000 plaintiffs, the dollar amount per aggrieved, not discounting for lawyers’ fees and the like, is just a touch over $5,000. After fees and taxes the real remuneration to harmed will be essentially zero.
That’s just not reasonable.