Justice Department Files Lawsuit Against EBay Over Intuit Agreement

[Techtaffy Newsdesk]

The Department of Justice has filed a civil antitrust lawsuit against eBay, alleging that it violated antitrust laws when it entered into an agreement not to recruit or hire Intuit’s employees.

The department filed its lawsuit in U.S. District Court in the Northern District of California, in San Jose.   The lawsuit seeks to prevent eBay from adhering to or enforcing the agreement and from entering into any similar agreements with any other companies.   Intuit is already subject to a settlement prohibiting it from entering into such agreements as part of an earlier case with the department.

The department alleges the agreement, which was enforced at the highest levels of each company, barred either firm from soliciting each other’s employees, and for over a year barred at least eBay from hiring any employees from Intuit at all.   In court papers, the department alleges that Meg Whitman, then eBay’s CEO, and Scott Cook, Intuit’s founder and executive committee chair, were intimately involved in forming, monitoring and enforcing the anticompetitive agreement.   Cook was serving as a member of eBay’s board of directors at the same time he was making complaints about eBay’s recruiting of Intuit employees.

According to the complaint, beginning no later than 2006, and lasting at least until 2009, eBay and Intuit entered an illegal agreement that restricted their ability to actively recruit employees from the other company, and for some period of time even restricted at least eBay from hiring any employees at Intuit.  In 2007, the pact evolved into an agreement that eBay would not recruit Intuit’s employees.   EBay’s recruiting personnel were instructed to not pursue potential applications that came from Intuit and to throw away such resumes, the department said.

The department said it was not necessary to name Intuit in the current complaint because the company had previously been named in the division’s September 2010 lawsuit and settlement, and the relief the department obtained in the previous settlement is sufficient to prevent Intuit from entering into these types of agreements.

In September 2010, the Antitrust Division filed a lawsuit against six high technology companies–Adobe Systems, Apple., Google., Intel, Intuit, and Pixar–over a series of bilateral agreements not to solicit each other’s employees.   All six companies entered into a settlement which prohibited them from entering agreements to refrain from, or pressure others to refrain from, soliciting, recruiting, or otherwise competing for another firm’s employees. The Antitrust Division also filed a lawsuit against Lucasfilm in December 2010 for entering into a similar agreement with Pixar, and Lucasfilm entered into a similar settlement.   The eBay case grew out of the same investigation.

Upload: 12-23-12

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