Bloomberg News

Facebook’s Sandberg May Be Deposed in Antitrust Case

April 02, 2013

Facebook’s Sandberg to Be Deposed in No-Recruiting Lawsuit

Sheryl Sandberg, chief operating officer of Facebook Inc. Photographer: Scott Eells/Bloomberg

Facebook Inc. (FB:US) Chief Operating Officer Sheryl Sandberg is scheduled to be questioned in a lawsuit alleging that seven technology companies broke antitrust laws by agreeing not to recruit from one another.

U.S. District Judge Lucy H. Koh in San Jose, California, yesterday allowed lawyers for employees suing the companies to conduct the deposition around April 23. Google Inc. (GOOG:US) and Apple Inc. (AAPL:US) are defendants in the case, along with Intuit Inc. (INTU:US), Intel Corp. (INTC:US), Adobe Systems Inc. (ADBE:US), Walt Disney Co. (DIS:US)’s Pixar animation unit and Lucasfilm Ltd. Neither Facebook nor Sandberg, who was formerly an executive at Google, is a defendant.

Plaintiffs’ lawyers in the case, which was filed in 2011, already have questioned Google Chief Executive Officer Larry Page, Lucasfilm CEO George Lucas and Apple CEO Tim Cook, among other executives, according to court filings.

The lawyers have said that their pretrial information gathering has confirmed that senior officers at the companies personally entered into non-solicitation agreements to eliminate competition for each other’s employees, kept the pacts hidden from the workers, supervised the implementation of the plans and policed each other.

The case mirrors claims the companies settled with the U.S. Justice Department in 2010 after the government alleged that the companies kept do-not-call lists to avoid competitive recruiting, and that such agreements restrained competition, which hurt employees.

U.S. Settlement

Lawyers for the employees have argued that while the settlement with the federal government exposed the illegal behavior and put an end to it, the agreement didn’t compensate the employees who were harmed.

Lawyers for the plaintiffs had asked Koh to let them try to schedule a deposition of Sandberg beyond a March 29 deadline for fact-gathering in the case, saying that Sandberg and Facebook didn’t respond to an earlier subpoena. They said a March 22 deposition of Page and a March 25 deposition of Intuit executive Alex Lintner confirmed Sandberg’s “relevance” to the anitrust case.

“Google believes that Ms. Sandberg is unlikely to offer any testimony that would be admissible or lead to admissible evidence,” according to a March 29 joint status report signed by lawyers for the plaintiffs and defendants.

From March 22 to March 29, Google produced six documents totaling 13 pages, including two spreadsheets concerning compensation, three calendar entries and Sandberg’s employment agreement with Google, according to the March 29 court filing. Some Google documents sought by plaintiffs’ lawyers in the case have been ruled off-limits because they are protected by attorney-client privilege.

Sandberg was hired as COO of Facebook in 2008 and appointed as the company’s first female director in June 2012. She is also a director of Walt Disney.

Google VP

Before joining Facebook, Sandberg was vice president of global online sales and operations at Google. Previously, she served as chief of staff for the U.S. Treasury Department under President Bill Clinton. She began her career as an economist with the World Bank. The book she wrote, “Lean In: Women, Work and the Will to Lead,” has climbed to No. 1 on bestseller lists.

Sarah Feinberg, a spokeswoman for Menlo Park, California- based Facebook, declined yesterday to comment on the deposition of Sandberg.

Both sides are waiting for Koh to rule whether the case will proceed as a group lawsuit, with a proposed class of employees including engineers, sous chefs, administrative assistants and others.

The San Jose case is In Re High-Tech Employee Antitrust Litigation, 11-2509, U.S. District Court, Northern District of California (San Jose). The previous case is U.S. v. Adobe Systems, 10-cv-1629, U.S. District Court, District of Columbia (Washington).

To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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