By Brent Kendall and Greg Bensinger
EBay Inc. on Thursday agreed to settle allegations by federal
and state officials that the company violated antitrust law by
agreeing with Intuit Inc. to refrain from recruiting each other's
employees.
The company's deal with the Justice Department, filed in a San
Jose, Calif., federal court, bars the Internet retailer from
maintaining or entering into new agreements with other companies to
restrict recruitment and hiring.
Separately, eBay agreed to pay $3.75 million in restitution and
penalties in a settlement with California Attorney General Kamala
Harris. The state said the money will be used to compensate
individuals employed by eBay or Intuit in California since
2005.
The largest payments, between $5,000 and $10,000, will go to
about 40 people who worked for Intuit and were considered for, but
not offered, a position at eBay, the state said.
The Justice Department and California sued eBay in 2012,
alleging its agreement with Intuit reduced competition between the
two tech companies for highly skilled workers, costing their
employees opportunities for better jobs and higher pay.
EBay was the eighth tech company to settle Justice Department
allegations of entering into anticompetitive "no-poach" hiring
agreements with other employers. Intuit settled with the department
in 2010, as did Google Inc., Apple Inc., Intel Corp., Adobe Systems
Inc., Walt Disney Co.'s Pixar Animation unit and Lucasfilm Ltd.,
which has since been acquired by Disney.
Thursday's settlement "is one further step toward closing an
unfortunate chapter for Silicon Valley and other companies who
unlawfully agreed to deny their employees the opportunity to
receive competing job offers," said Bill Baer, the Justice
Department's antitrust chief.
EBay said it "continues to believe that the policy that prompted
this lawsuit was acceptable and legal, and led to no
anticompetitive effects in the talent market in which eBay
competed." Any hiring practices that could have raised concerns
with the Justice Department ceased years ago, the company said.
Hiring has become something of a competitive sport in Silicon
Valley, with the most talented software engineers commanding
skyrocketing salaries, particularly as companies' valuations
continue to rise. The most-talented employees often are showered
with perks to ensure they don't leave for competitors.
The Justice Department alleged that the no-poach agreement
between eBay and Intuit began no later than 2006 and ran until at
least 2009, involving executives at the highest level, including
eBay's former chief executive Meg Whitman and Intuit's co-founder
and executive-committee chairman Scott Cook, who has been an eBay
board member since 1998.
In April, Google, Apple, Intel and Adobe agreed to settle a
lawsuit brought by 64,000 employees who said their wages had been
depressed because of agreements among those companies not to
recruit one another's workers. The settlement was around $325
million, a person familiar with the terms told The Wall Street
Journal last month.
Evidence in that case included emails among top executives like
Apple's Steve Jobs and Google's Sergey Brin and Eric Schmidt
conferring about hiring plans.
Lucasfilm, Pixar and Intuit settled private ligation last year
for a combined $20 million.
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