On Aug. 8, 2014, Judge Lucy Koh of the U.S. District Court for the Northern District of California rejected the proposed settlement of a class action brought by employees of Silicon Valley technology companies alleging that the companies had entered into agreements not to solicit each other’s employees. In re: High Tech Emp. Antitrust Litig., 2014 U.S. Dist. LEXIS 110064 (N.D. Cal. Aug. 8, 2014).

Plaintiffs filed complaints against certain high-tech companies and film studios alleging they had entered into agreements not to solicit each other’s employees. In April 2013, the court denied a motion for class certification on the ground that the plaintiffs’ expert had failed to demonstrate class-wide impact. Plaintiffs again filed a class certification motion and while it was pending, and they settled their claims against certain defendants for a total of $20 million. In October 2013, the court approved that settlement. The litigation continued against the high-tech companies, and in October 2013 the court granted class certification as to a narrowed class of employees. In March 2014, the court denied the defendants’ summary judgment motion. Shortly before the trial was set to begin, the parties informed the court that they had reached a settlement. Plaintiffs filed a motion for preliminary approval of a settlement totaling $324.5 million, and one class member objected to the settlement.

On Aug. 8, the court denied the motion for preliminary approval based on several considerations. The court concluded that the amount of the settlement with the high-tech companies was proportionally less than the prior settlements, particularly in light of the fact that the high-tech settlement was reached after plaintiffs had succeeded in obtaining class certification. The court also felt that plaintiffs have a strong case against the high-tech companies and discounted the conceded weaknesses in plaintiffs’ case. The court denied the motion for preliminary approval and set a new trial date for April 9, 2015. The defendants filed a petition with the 9th U.S. Circuit Court of Appeals seeking a writ of mandamus directing the district court to vacate its order denying preliminary approval and to enter an order granting preliminary approval. The 9th Circuit accepted the petition, instructed the plaintiffs to file a response, invited the district court to file a response as well, and will set a hearing on the merits.

The district court’s Aug. 8 order denying preliminary approval, and the defendants’ petition to the 9th Circuit, are availablehere.