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I Got My High-Tech Antitrust Settlement Check!

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Yes! I just received my High-Tech Antitrust Settlement Check! If you’ve been paying careful attention to my recent cash flow updates, you would have seen a hint about this. I was hoping for a windfall so I can use it to beef up our liquidity and contribute a little extra to our tax advantaged accounts. I knew this settlement would come around the end of the year and I have been eagerly waiting for it.

high-tech antitrust settlement

(Sorry, I deposited the check right away and forgot to scan it. This was the previous check.)

High-Tech Antitrust Litigation

So what’s this lawsuit about? Basically, the management of the companies named in this lawsuit had a verbal agreement to avoid recruiting from each other. This agreement limits employees’ mobility and represses their wages. The Department of Justice filed a complaint against these companies alleging violations of the Sherman Antitrust Act in September, 2010. The civil class action lawsuit followed in May 2011 on behalf of over 64,000 employees of Adobe, Apple, Google, Intel, Intuit, Pixar, and Lucasfilm. In October 2013, Pixar, Lucasfilm, and Intuit agreed to pay $20 million in damages. This year, the rest of the companies settled for $415 million! That’s 20 times more than the first settlement, but it’s still a tiny drop in the bucket for those companies. They really should have paid through the nose for violating the Antitrust Act. Then again, I’m a disgruntled employee so my opinion is a bit biased.

I received $1,340 from the first $20 million settlement so I had high hopes for this much bigger settlement. It seems like simple math. If the settlement is 20x bigger, then I should get 20 x $1,340, right? That’s around $27,000. I guess not because my check was just $7,000. That’s a nice Christmas bonus from my former employer, but I’d love to see how they calculated this payout. I also heard from a reader whose check was just 28% larger than the previous check. That doesn’t sound right at all.

Ahh… I see. I just checked the settlement FAQ and it looks like the Settlement Administrator will reserve $250 million thousand to resolve any disputes.  So this check is just a fraction of the settlement*. We’ll get the rest of the settlement sometime next year. I’m guessing we’ll get $10,000-$15,000 next time. (Oops, I didn’t read the document carefully enough. See the first comment below for a better explanation. The next check will be a very small check.)

*I believe the lawyers will receive a little over $40 million from the settlement. The payment will be deducted from the $415 million settlement.

How will we spend our $7,000 windfall?

Unfortunately, we won’t be able to splurge this windfall. Last time, we were able to go for a luxurious spa date, but this time we’ll just put it in the bank. Our liquidity is very low right now. We only have $6,000 in our cash fund and we need to beef that up to at least $15,000 as soon as possible. The last few months were tough and we drained our savings account to pay for our Costa Rica trip, the property taxes, and fix up the duplex, to name a few. Next year, we need to be better prepared for the end of the year. I want to build up $25,000 in cash by November so we won’t run low again.

Did you receive your settlement check? You can share anonymously here so we can compare. What will you do with this windfall?

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{ 32 comments… add one }

  • Henry S. Kim December 30, 2015, 1:04 am

    The FAQ states that the reserve amount to settle possible disputes is $250 thousand, not $250 million. The reason your second payment was not 20x your first payment is because the first payment was distributed under an “opt-in” basis. You had to opt in to receive a settlement. However, the second payment was distributed under an “unless opted-out” basis. You did not need to do anything to receive a settlement, but you could opt-out and choose not to receive a settlement. Comparatively fewer individuals opted in for the first settlement, meaning that the $20 million was divided by fewer individuals. Furthermore, those who opted in for the first settlement -happened- to be in the top percent of earners. That is, their salaries skewed higher among the full 64,000 employees. Since the second settlement included most everyone (except those few who specifically opted out), the salary distribution was much broader and so in order to get the larger check you had to be at the top end of the salary scale. The individual who contacted you that saw a second check that was only 28% higher than the first check simply had a lower salary. My second check, like yours, was on the order of 5X the first check. At one point months ago, I reviewed the entire court document set (link below) that detail exactly how many people opted in, where their salaries fell within all 64,000, and how many people opted out, plus the “key amounts” held back for the handful of individuals who represented the class (not the lawyers but the key employees affected) as a reward (of sorts), and pre-calculated my expected check. My prediction was off by only 7% in the amount of the second check. One important thing to notice is that approximately one-third of the second check has taxes withheld via W2. However, the remaining two-thirds is considered statutory multiplier damages for which we’re each issued a 1099. This means that you are supposed to withhold your -own- taxes because at tax time that two-thirds will be considered income for which taxes have not yet been taken out. So be prepared to hold back as much as 25% of the 1099 portion to give back to the IRS at tax time. Ouch.

    If you’re interested, you have to make your way through this court document to derive the same calculation method (warning: it will take you hours to go through this and digest it):
    http://www.leagle.com/decision/In%20FDCO%2020150904674/In%20re%20High-Tech%20Employee%20Antitrust%20Litigation#

    • retirebyforty December 30, 2015, 10:41 am

      Henry, Thank you for clearing that up!
      I really appreciate it. I had about $1,000 withheld.
      I hope you get to splurge a bit with your check. Happy New Year!

  • John C @ Action Economics December 30, 2015, 2:03 am

    Wow, that is still an awesome chunk of change, congrats on actually getting something out of the deal. Mrs. C. recently received a mailing about a class action settlement in which she was listed as a person in that class, regarding a major bank preforming credit checks without authorization, or something to that effect, My guess is she’ll get around $20, but who knows? Replenishing cash reserves sounds like the best choice.

    • retirebyforty December 30, 2015, 10:41 am

      I usually get $5-$20 from these class action settlement. This one was a lot bigger than usual. I don’t think we’ll see anything like this anytime soon.

  • Pennypincher December 30, 2015, 2:54 am

    Wow. Very interesting. I agree, adding to the cash reserve fund (put & take account) is the best idea. I heard the stock market is due for another drop, so that’s what I’d do as well.
    Talk about disgruntled employee. I could write the book on the subject. It’s no wonder I’m so darn happy in retirement. The behavior I’ve witnessed over my working years, ridiculous.
    Thanks for sharing, very interesting. Good to see the govt. at work catching the corporate greed machine, forcing them to “pay up”. Happy New Year!

    • retirebyforty December 30, 2015, 10:45 am

      I think 2016 will be the year to hoard cash and see how the market goes. We might wait to invest until we see a pullback.
      I turned quite disgruntled in my last few years in the corporate job. The executive officers were getting outsize rewards and the people who did the hard word, didn’t.
      They should have gone for the original $3 billion lawsuit…

  • Mr. Tako @ Mr. Tako Escapes December 30, 2015, 3:56 am

    Wow, congrats on that windfall Joe! I’ve never heard of anyone actually receiving significant payments from these kinds of class action lawsuits before. It’s good to know good things happen once in awhile!

    • retirebyforty December 30, 2015, 10:46 am

      Thanks! It’s nice to get this just when we needed it. 🙂

  • Dave in Sunny Fl December 30, 2015, 6:07 am

    Congratulations! Over the years, I have learned to always make sure to review all of the materials when I receive information about a potential class-action suit. Your settlement check just seems like money you deserved, finally coming to you. I feel like I have had some real windfalls over the years, getting checks back on purchases where I thought the price was fair at the time. Also, I have learned to hold onto ALL of our brokerage statements, indefinitely. I have been able to make claims in litigation involving several stocks (like Bank of America and Regions Bank) only because I was able to identify every purchase and purchase price, several years after the fact.

    • retirebyforty December 30, 2015, 10:48 am

      Thanks! I keep all my stock records too. It’s in a big box and it’s difficult to find the exact transaction, but it’s there.

  • Sam @ Financial Samurai December 30, 2015, 6:41 am

    Awesome! I get these things in the mail all the time, and NEVER get anything in return! A $7,000 settlement is huge!

    I think I’d use it on a 3 week international trip. Turn the money into magical moments and memories, so it GROWS in value over time.

    • retirebyforty December 30, 2015, 10:49 am

      Really? I usually get $5-$20 checks. 🙂 I just got another one about KMP, but I don’t think I’ll get much from that one.
      Great idea about the trip. I don’t know if it really grows over time. My memory is terrible and I don’t look back too much. Just go forward.

  • Debbie December 30, 2015, 7:05 am

    I received my check this week as well. My check last year was around $1100, this one was just over $2200. Not what I thought it might be, but I’m certainly not complaining. My bank account appreciates it!

    • retirebyforty December 30, 2015, 10:50 am

      That’s great! I hope you can use a small portion to splurge a bit. Thanks for sharing.

      • Steve December 31, 2015, 8:24 am

        I too am an ex INTEL employee and received my settlement check. However I did not get a check last year unlike you guys. Am I missing something? I wonder if I just threw it away thinking it was junk mail 🙁

        • retirebyforty December 31, 2015, 10:05 am

          You need to opt in for the first check. You might have missed the opt in letter from a couple of years ago.

  • Justin December 30, 2015, 7:14 am

    Pretty awesome windfall!

    I’d probably save it up and increase your cash buffer if I were in your position.

    As for the lawyer’s fees, it’s crazy how half or a third of these megamillion settlements go to the lawyers.

    • retirebyforty December 30, 2015, 10:51 am

      Actually, the lawyer’s fees in this settlement seems okay. They asked for $80m, but got less. They spent 4 years so I guess they deserve it. $40m is still a lot, though.

  • anon December 30, 2015, 9:01 am

    This year I received a $250k settlement and I’m trying to figure out how to use it. Should I buy a house for personal/primary residence? Buy some real estate for rental property? I’m much more interested in hard assets than stocks, but I understand that they have higher projected returns. I’m young and this settlement makes up 90% of my current networth.

    • retirebyforty December 30, 2015, 10:52 am

      I’d buy some rental properties. You can try being a landlord and see how you like it. I’d get a mortgage, though. The rate is still very low.
      I guess it really depends on where you are. Good luck!

  • Michelle December 30, 2015, 9:35 am

    Wow, that’s a big settlement check!

    • retirebyforty December 30, 2015, 10:53 am

      Definitely, the biggest I’ve ever receive. It’s a great New Year gift. 🙂

  • nicoleandmaggie December 30, 2015, 10:25 am

    Nice! Though I wonder how it compares to the amount they saved by not competing for employees.

  • Leigh December 30, 2015, 11:23 am

    Nice! I wasn’t out of college yet during the time period the settlement was for. That’s a pretty sweet unexpected end of year bonus 🙂

  • SavvyFinancialLatina December 30, 2015, 3:20 pm

    Sweet! That’s a nice chunk of change. Nice XMAS present.

  • Adam @ AdamChudy.com December 31, 2015, 9:59 am

    Extra checks you didn’t expect are magical! It’s the best gift you can get.

    Every year or insurance company, Amica, sends out its dividend check. I always forget and it’s a great December surprise.

  • Anon January 3, 2016, 10:27 pm

    I got mine last week, huge surprise as I thought this would be like other settlements and maybe end up $100… mine was about 5600. We’ll treat it like all our other bonuses and just put it into savings. I did end up splurging a bit the next day on a day put with my sibling…probably because of the check. Anyway cool extra money.

    • retirebyforty January 4, 2016, 8:21 am

      That’s an awesome surprise! It’s nice to get much more than expected. 🙂

  • Fred thomason January 4, 2016, 8:08 am

    It seems that manufacturing technicians are not receiving checks. Is their a pay grade cutoff for being in this settlement?

    • retirebyforty January 4, 2016, 8:48 am

      You should check the settlement website. I think it depends on your job. I don’t think retail workers are included. I’m not sure about manufacturing technicians.

  • Dave January 12, 2016, 2:49 pm

    Attorneys got millions of dollars on this and they sent my check to an address I haven’t lived at in 10 years. WTF? Still waiting for them to correct. Sigh.

  • Eric Gifford May 13, 2016, 8:16 am

    Henry S. Kim did an excellent job of explaining why the second payment was so much lower, as a percentage of the overall settlement, compared to the first payment. I had calculated the estimated second payment assuming the size of the group (the ~64,000 people who had actually joined the class) would be the same as had received the first payment. I reviewed all the court documents and settlement info to factor in attorney’s fees, “out of pocket” costs, class rep & misc fees, etc. The % taken out of the first settlement for attorney’s fees was a lot higher than for the second because Judge Koh put a limit on the % of fees they could take. She didn’t them to enjoy a windfall because of the size of the second settlement. Thus, as a percentage, the second payment should have been much larger…assuming the same class size. In fact, according to my calculations, it should have been ~35% larger. At that point, I had no idea that the second “Phase” of the lawsuit would automatically “opt-in” all the people who did absolutely nothing to join the class. Needless to say, when I received my second check and it was closer to 5x what my first settlement payment, I was EXTREMELY disappointed and confused. Then, over the next few weeks, I started hearing from previous co-workers at Intel who were so happy/surprised to be receiving their “free money”, which they did nothing to receive. I quickly deduced what had happened. I had never been part of a class action suit in which you didn’t actually have to be part of the “class” (a group which took the time to read the class documents and submitted their class registration by the required deadline) in order to receive a portion of the settlement. Live and learn, right? This whole ordeal was a fantastic “don’t count your chickens before they hatch” lesson.

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