eBay sued over will-not-recruit agreement with Intuit

Eliminated competition for workers: Department of Justice
By David Ingram
|hrreporter.com|Last Updated: 11/19/2012

WASHINGTON (Reuters) — The United States Justice Department and the state of California sued online retailer eBay on Friday over what they called an illegal agreement with Intuit not to recruit Intuit’s employees.

The agreement eliminated competition for workers, depriving them of access to better job opportunities, said the Justice Department and California attorney general Kamala Harris in simultaneous news releases.

Meg Whitman, then eBay’s CEO, and Scott Cook, Intuit’s founder, were intimately involved in forming and enforcing the agreement, federal officials said.

EBay said the government is wrong and it will vigorously defend itself.

“EBay’s hiring practices conform to the standards that the Department of Justice (DOJ) 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.

Tax and financial software company Intuit, which faced similar antitrust allegations in 2010 and settled, called the new lawsuits a matter for eBay.

“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.

The “handshake” agreement was in effect from 2006 until 2009 or later, federal officials said. During that time, eBay’s recruiting staff were instructed to throw away resumés that came from Intuit employees, the officials said.

Federal antitrust 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 division.

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.

A proposed class action pending in federal court in California also addresses anti-poaching agreements among the six technology companies: Adobe Systems, Apple, Google, Intel, Intuit and Pixar.

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