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State, Feds Sue eBay Over Alleged Anti-Poaching Pact
SAN FRANCISCO EBay Inc. is prepared to fight federal and state lawsuits alleging it violated antitrust laws by entering an anti-poaching pact with software developer Intuit Inc.
The company, represented by Thomas Brown, litigation partner at Paul Hastings, said through a spokeswoman it would "vigorously defend itself against new suits alleging anti-competitive practices.
The Department of Justice and California Attorney General Kamala Harris on Friday filed suits in U.S. District Court in San Jose accusing the online auction site and its former CEO, Meg Whitman, of reaching an illegal "handshake" agreement with Intuit not to recruit or hire each other's employees.
EBay spokeswoman Lara Wyss said in a statement, "We compete openly for talent in a broad, diverse global market across a range of industries and professional disciplines, and eBay's hiring practices conform to the standards that the Department of Justice has approved in resolving cases against other companies."
The action against eBay comes roughly two years after the DOJ reached settlements with several technology companies, including Google Inc. and Apple Inc., over similar allegations.
The complaints claim Whitman and Intuit founder Scott Cook, an eBay board member, took part in establishing and enforcing the agreement, which was in effect from 2006 to 2009.
For at least one year, eBay refrained from hiring any Intuit workers and human resources personnel were told to throw away résumés from Intuit, the complaint states.
"EBay and Intuit called a truce in the 'war for talent' to protect their own interests at the expense of their employees," the lawsuits state.
The federal suit asks the court to block eBay from enforcing the compact and from entering any similar agreements with other companies. The matters have initially been assigned to U.S. Magistrate Judge Paul Grewal.
The AG said in a statement that eBay's actions harmed employees and that the public is served when companies compete for workers.
"If California is going to continue to be the high-tech capital of the world, we can't allow anti-competitive conduct that prevents talent from going where it's put to its highest use," Harris said.
In 2010, the Justice Department entered consent decrees with Google, Apple, Adobe Systems Inc., Intel Corp., Intuit and Pixar that barred the companies from agreeing not to recruit each other's employees. The DOJ's Antitrust Division brought a separate lawsuit against Lucasfilm. The eBay case grew out of the same investigation.
A class action is pending before U.S. District Judge Lucy Koh on behalf of high-tech workers employed by those companies between 2005 and 2009. A hearing on class certification is scheduled for early next year.