Bloomberg News

EBay to End No-Poach Pacts in U.S. Antitrust Settlement (2)

May 01, 2014

EBay Inc. (EBAY:US) settled a U.S. lawsuit accusing it of violating antitrust laws by agreeing not to hire Intuit Inc. (INTU:US) employees, bringing an end to a Justice Department crackdown on Silicon Valley hiring practices.

EBay, the world’s largest online marketplace, agreed to refrain from entering into unlawful accords with other companies to not hire each other’s workers, the Justice Department said today. EBay also settled with California and agreed to pay $3.75 million to the state.

The settlement follows last week’s agreement by Apple Inc., Google Inc. (GOOG:US), Intel Corp. and Adobe Systems Inc. to settle an employee lawsuit over claims they conspired to suppress salaries by not recruiting one another’s workers. Those Silicon Valley-based companies agreed to pay $324 million, a person familiar with the matter said.

Bill Baer, the head of the Justice Department’s antitrust division, said his office doesn’t have any other active investigations into recruitment practices by companies.

EBay’s agreement with Intuit limited competition between the two companies and caused employees to lose opportunities for better jobs, the Justice Department said.

“The behavior here was blatant and egregious,” Baer said in a conference call with reporters. “Part of what we’ve done here is make it abundantly clear to high-tech companies that the antitrust laws apply to them. You can’t innovate your way around the antitrust laws.”

Apple, Google

The case stems from a series of Justice Department investigations into employee-recruitment practices at high-tech companies. In 2010, the U.S. settled claims against Adobe, Apple, Google, Intel, Intuit, Walt Disney Co. (DIS:US)’s Pixar unit and Lucasfilm Ltd.

EBay didn’t admit to violating the law as part of the settlement, according to a federal court filing in San Jose, California.

“EBay continues to believe that the policy that prompted this lawsuit was acceptable and legal,” the San Jose-based company said in a statement. “EBay competes aggressively to attract and retain the best talent, while conforming to the hiring-practices standards established by the Department of Justice in prior hiring-related cases.”

The U.S. complaint against EBay, filed in 2012, accused senior executives at EBay and Intuit of striking “evolving handshake” accords from 2006 to 2009 to restrict recruiting and hiring each others’ workers. The practice allegedly distorted competition for specialized computer engineers and scientists.

Meg Whitman

EBay and Intuit executives involved included EBay’s former Chief Executive Officer Meg Whitman, now CEO of Hewlett-Packard Co. (HPQ:US), and Intuit co-founder Scott Cook, according to the Justice Department.

Intuit, the largest seller of personal-finance software, wasn’t a defendant in the federal case against EBay. Intuit settled California’s claims over no-hire agreements last June.

The Justice Department case is U.S. v. EBay, 12-05869, U.S. District Court, Northern District of California (San Jose). The state case is California v. EBay, 12-05874, U.S. District Court, Northern District of California (San Jose).

To contact the reporters on this story: David McLaughlin in Washington at dmclaughlin9@bloomberg.net; Joel Rosenblatt in federal court in San Jose, California, at

jrosenblatt@bloomberg.net

To contact the editors responsible for this story: Sara Forden at sforden@bloomberg.net; Michael Hytha at mhytha@bloomberg.net Michael Hytha, David Glovin


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Companies Mentioned

  • EBAY
    (eBay Inc)
    • $52.73 USD
    • 0.26
    • 0.48%
  • INTU
    (Intuit Inc)
    • $85.79 USD
    • 0.27
    • 0.31%
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