By Dow Jones Business News,
May 01, 2014, 06:49:00 PM EDT
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
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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