DOJ says eBay must end 'no poaching' pacts with other companies

The e-commerce company will settle suits brought by the Justice Department and California attorney general for alleged agreements with Intuit.

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CNET

Both the U.S. Department of Justice and the California Attorney General's Office on Thursday reached settlements with eBay, telling the company it cannot make -- or maintain -- agreements with other companies not to raid each other's talent.

The offices alleged in similar 2012 lawsuits that the e-commerce company had made that type of agreement, dating to at least 2006, with the financial-software company Intuit.

The California Attorney General's settlement is for $3.75 million, which would in part go toward paying current or former employees at eBay or Intuit whose employment opportunities between the two companies were limited because of the practice. The settlement covers employees in California who worked at the companies as far back as 2005.

While eBay acknowledged that it will pay the settlement, the company disagrees with the California attorney general's assessment of the situation. "eBay 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," the company said in a statement.

The lawsuits allege that the anti-poaching policies were overseen at the highest levels of both companies, including then-eBay CEO Meg Whitman and Intuit co-founder and executive committee chair Scott Cook. The settlements still need approval from the US District Court for the Northern District of California in San Jose, Calif.

"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, in a statement.

California Attorney General Kamala Harris echoed the sentiment. "California's technology sector is at its best when competition and creativity are allowed to thrive," Harris said, also in a statement.

The broader issue of wage-fixing has gotten more attention recently, especially in Silicon Valley, where top engineering talent is a prized commodity. A class action lawsuit filed by high-tech workers was settled out of court last week. The suit alleged that companies including Apple, Google, Adobe, and Intel had made pacts not to recruit each other's employees in an effort to not drive up the workers' salaries.

The settlements would also mandate that eBay perform certain tasks for the next five years, including providing an annual report describing any violation or potential violations of the settlements, and training employees on the issue. Intuit is already held to similar requirements, the Justice Department said, which is why it was not included as a defendant in the lawsuits.

Updated at 1:13 p.m. PT: Adds statement from eBay.

 

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