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The Justice Department alleged the online retailer and software company Intuit crafted non-compete hiring agreements that violate antitrust laws.
EBay Inc. last week agreed to settle allegations that the company violated antitrust laws by agreeing with software company Intuit Inc. to not poach each other’s employees. In a related settlement, eBay agreed to pay $3.25 million to compensate employees of eBay and Intuit harmed by the no-poaching agreement, which apparently was common in Silicon Valley in recent years.
The lawsuit, filed in federal court in San Jose, CA, alleged that high-level executives at eBay and Intuit agreed not to recruit each other’s employees. The settlement prevents eBay from entering into similar agreements with other companies.
Bill Baer, the U.S. Justice Department’s antitrust chief, called the behavior “blatant and egregious.” Communication between eBay and Intuit—including e-mails between then-eBay CEO Meg Whitman and Intuit’s founder and executive committee chair Scott Cook—documented the collusion, the suit says. One e-mail exchange was prompted by Intuit allegedly giving a recruitment flyer to an eBay employee.
EBay, in a separate settlement, agreed to pay $3.75 million in restitution and penalties to compensate employees of eBay and Intuit in California who were harmed by the non-competitive hiring agreement. The number of affected employees was not released.
EBay is the eighth tech company to settle with the Justice Department over such hiring practices since the department filed its first such case in 2010 against Adobe, Apple, Google, Intel, Intuit and Pixar. “Those settlements required an immediate halt to the illegal conduct and instituted strong and broad prohibitions against any recurrence,” said Baer in a conference call. “And today’s settlement with eBay does the same and resolves the concerns that caused us to file suit against them in November 2012.”
Google, Apple, Intel and Adobe agreed to settle in April a lawsuit brought by employees claiming their wages were negatively affected by the non-compete agreements. The settlement amount in that case has been estimated at $325 million but has not been confirmed by the companies involved. Lucasfilm, Pixar and Intuit settled another case last year for a total of $20 million.