The U.S. Justice Department and the state of California sued e-commerce company eBay Inc on Friday over what they called an illegal agreement with Intuit Inc not to recruit Intuit's employees.
agreement eliminated competition for workers, depriving them of access
to better job opportunities, the Justice Department and California
Attorney General Kamala Harris said in simultaneous news releases.
Whitman, then eBay's CEO, and Scott Cook, Intuit's founder, were
closely involved in creating and enforcing the agreement. Cook was
serving on eBay's board at the same time he was complaining about eBay's
recruiting of Intuit employees, federal officials said.
EBay said the government is wrong and that it will vigorously defend itself.
hiring practices conform to the standards that the Department of
Justice has approved in resolving cases against other companies. The DOJ
is taking an overly aggressive interpretation in their enforcement of
antitrust law in this area," said eBay spokeswoman Lara Wyss.
and financial software company Intuit, which faced similar antitrust
allegations in 2010 and settled, called the new lawsuits a matter for
"We have already resolved any concerns that the DOJ had
about our recruiting practices and believe the matter for Intuit is
closed," said Intuit spokeswoman Diane Carlini.
A spokesman for Whitman, who left eBay in early 2008 and now leads Hewlett-Packard Co , declined to comment.
suit, and similar legal issues involving other technology companies,
highlight the intense competition for talent in Silicon Valley. It also
shows how the search for talented employees can sometimes clash with
relationships on the boards of top technology companies.
"handshake" agreement between eBay and Intuit was in effect from 2006
until 2009 or later, federal officials said. During that time, eBay's
recruiting staff were instructed to throw away resumes that came from
Intuit employees, the officials said.
The policy was put in place
to avoid an awkward situation in which eBay might have recruited Intuit
staff while Cook was on the eBay board, according to a person familiar
with eBay's stance on the case.
In 2007, Apple Inc's Steve Jobs asked former Google Inc
Chief Executive Eric Schmidt to stop trying to recruit an Apple
engineer, a transgression that threatened one junior Google employee's
job, according to a court filing earlier this year. At the time, Schmidt
was an Apple board member.
EBay believes its
policy was not illegal because it did not have an effect on the market.
The positions being sought, including in marketing and engineering, were
so broad that the job seekers had lots of opportunity to find
employment elsewhere, the person familiar with the company's position
said. He spoke on condition of anonymity because they were not
authorized to speak publicly about the case.
enforcers have "consistently taken the position that these kinds of
agreements are per se unlawful under the antitrust laws," said Joseph
Wayland, acting head of the U.S. Justice Department's antitrust
EBay ended its recruiting policy after the DOJ changed
its legal position on such agreements, according to the person familiar
with the company's stance.
In the past, the DOJ focused on whether
such agreements actually impacted the market. But it changed that in
2009 to assume that such policies automatically had an impact and were
therefore illegal, the person added.
The lawsuits target eBay only
because Intuit was already a defendant in a wide-ranging 2010 lawsuit
that federal officials brought against six technology companies. Intuit
signed a settlement agreement with the government that federal officials
call sufficient to prevent similar conduct in the future.
The eBay case grew out of the same wide-ranging investigation, officials said.
proposed class action pending in federal court in California also
addresses anti-poaching agreements among the six technology companies:
Adobe Systems Inc , Apple, Google, Intel Corp , Intuit and Pixar.
Copyright Thomson Reuters 2012