JUSTICE DEPARTMENT REQUIRES EBAY TO END ANTICOMPETITIVE
"NO POACH" HIRING AGREEMENTS
Settlement Preserves Competition for High Tech Employees
WASHINGTON - The Department of Justice announced today that it
has reached a settlement with eBay Inc. that prevents the company
from entering into or maintaining agreements with other companies
restraining employee recruitment and hiring.
The department's Antitrust Division filed the proposed
settlement in the U.S. District Court for the Northern District of
California in San Jose. If approved by the court, the settlement
would resolve the department's competitive concerns and the
original lawsuit filed on Nov. 16, 2012.
In its lawsuit, the department alleged that senior executives
and directors of eBay and Intuit entered into an agreement,
beginning no later than 2006, that prevented each firm from
recruiting employees from the other and that prohibited eBay from
hiring Intuit employees that approached eBay.
In the high technology sector, employees with advanced or
specialized skills are highly valued and sought after. Companies
often heavily recruit and hire experienced and capable employees of
other technology firms, offering significantly better job
opportunities or pay. The agreement between eBay and Intuit
diminished important competition between the firms to attract
highly skilled technical and other employees to the detriment of
affected employees who had less access to better job opportunities
and higher pay.
"eBay's agreement with Intuit served no purpose but to limit
competition between the two firms for employees, distorting the
labor market and causing employees to lose opportunities for better
jobs and higher pay," said Bill Baer, Assistant Attorney General in
charge of the Department of Justice's Antitrust Division. "The
proposed settlement resolves the department's antitrust concerns
and ensures that eBay will not engage in similar conduct in the
future."
Previously, in denying eBay's motion to dismiss the case, the
district court found that the agreement alleged by the department,
if proven, would constitute a naked horizontal market allocation
agreement that was manifestly anticompetitive and lacking in any
redeeming virtue, and thus could be found per se unlawful.
The proposed settlement would prohibit eBay from entering or
maintaining anticompetitive agreements relating to employee hiring
and retention for five years. It would broadly prohibit eBay from
entering, maintaining or enforcing any agreement that in any way
prevents any person from soliciting, cold calling, recruiting,
hiring or otherwise competing for employees. eBay will also
implement compliance measures tailored to these practices. Intuit
is already subject to a similar consent decree, and for that reason
was not a defendant in this case.
Today, the California Attorney General's Office also filed a
settlement in its related case, The People of the State of
California v. eBay Inc., based on the same facts alleged in the
department's complaint.
This case and the proposed settlement arose out of a series of
Antitrust Division investigations into employee recruitment
practices at a number of high tech companies. In September 2010,
the Antitrust Division filed a civil antitrust lawsuit against six
high tech firms- Adobe Systems Inc., Apple Inc., Google Inc., Intel
Corporation, Intuit Inc. and Pixar-for antitrust violations arising
from "no cold call" agreements. In December 2010, the Antitrust
Division filed a civil antitrust lawsuit against Lucasfilm Ltd.
alleging antitrust violations involving similar activities
restraining competition for employees. In both cases, settlements
were filed at the same time the lawsuits were filed resolving the
department's competitive concerns. Today's proposed settlement with
eBay is substantially the same as the court-approved settlements in
the two prior cases.
eBay Inc. is a California corporation with its principal place
of business in San Jose.
The proposed settlement, along with the department's competitive
impact statement, will be published in The Federal Register, as
required by the Antitrust Procedures and Penalties Act. Any person
may submit written comments concerning the proposed settlement
within 60 days of its publication to James J. Tierney, Chief,
Networks & Technology Enforcement Section, Antitrust Division,
U.S. Department of Justice, 450 Fifth Street N.W., Suite 7100,
Washington D.C. 20530. At the conclusion of the 60-day comment
period, the court may enter the final judgment upon a finding that
it serves the public interest.
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