Recent ruling weakens suit by
ex-Qualcomm workers
By Bruce V. Bigelow
UNION-TRIBUNE STAFF WRITER
December 23, 2000
San Diego Superior Court Judge John S. Meyer postponed
action yesterday in a class-action lawsuit filed by
ex-Qualcomm employees who allege that they were
improperly denied stock options, but he dealt a devastating
blow to the case in a ruling earlier this month.
Meyer ruled Dec. 8 that a bonus retention plan offered to
more than 1,000 Qualcomm employees was validly
accepted by more than 800 workers, and he dismissed them
from the case.
About 35 former Qualcomm employees remain as part of
the lawsuit, although attorneys for Qualcomm have asked
the judge to decertify their class-action status, arguing that
each case should be tried individually.
The ruling greatly reduces the stakes for Qualcomm, which
by some estimates faced as much as $400 million in
damages if the entire class had been included in the case.
In yesterday's hearing before Meyer, Qualcomm attorneys
asked the judge to dismiss certain fraud allegations made
by the former employees. But Meyer decided to postpone
the matter, saying he would hear arguments over the fraud
allegations and Qualcomm's request to decertify the class
action Jan. 19.
A trial in the case has been tentatively scheduled to begin
Feb. 16.
The lawsuit was filed in 1999, after Qualcomm sold its
wireless network equipment business to rival Ericsson as
part of an agreement to end a long-running feud over
patents and other matters.
More than 1,000 employees who worked in the Qualcomm
division were transferred to Ericsson as part of the sale,
but they were not allowed to cash in their options to buy
discounted shares of Qualcomm stock.
Their angst only deepened as the value of Qualcomm
shares skyrocketed more than 2,600 percent in 1999,
largely in reaction to the Qualcomm-Ericsson truce. Some
of the ex-employees held options worth more than $1
million.
In a bid to mollify the former employees, Qualcomm
offered what it called a bonus retention plan that would
give the employees a percentage of their unvested stock
options if they signed a release saying they would not
pursue legal action.
About 97 percent of the employees signed the release,
although many of them later decided to join the lawsuit as
plaintiffs anyway.
In his ruling earlier this month, Meyer upheld the validity
of those signed releases. "The essence of this case is fairly
simple," he wrote.
The plaintiffs claim that Qualcomm breached their
employment contract by denying them accelerated vesting
of their stock options. Qualcomm maintains that these
employees signed a full release that included compensation
-- which they have accepted.
Because of that, the judge excluded them from the case. |
