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EcommerceBytes-NewsFlash, Number 2938 - November 19, 2012 - ISSN 1539-5065    1 of 5

Feds Sue eBay over Alleged Hiring Collusion

By Ina Steiner
November 19, 2012

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While it doesn't have the headline-grabbing elements of a CIA sex scandal, eBay is facing major embarrassment after the Justice Department and the state of California sued the company over the content of emails allegedly sent between its former CEO Meg Whitman and board member Scott Cook, CEO of Intuit.

According to the complaint, the CEOs at eBay and Intuit entered into an agreement as early as 2006 to restrict their ability to actively recruit employees from each other's company. In 2007, the pact allegedly evolved into an agreement that eBay would not recruit Intuit's employees. "eBay's recruiting personnel were instructed to not pursue potential applications that came from Intuit and to throw away such resumes," the DOJ said.

A lawyer for the DOJ's Antitrust Division Joseph Wayland said, "eBay's agreement with Intuit hurt employees by lowering the salaries and benefits they might have received and deprived them of better job opportunities at the other company. The Antitrust Division has consistently taken the position that these kinds of agreements are per se unlawful under the antitrust laws."

Bloomberg obtained a copy of the lawsuit and wrote, "eBay initially sought a limited no-solicitation agreement aimed at high-level employees, and expanded it to "placate" Cook, who was on eBay's board and had complained about eBay's hiring practices."

eBay spokesperson Lara Wyss said, "eBay Inc. strongly believes that the Department of Justice and California Attorney General are wrong and are using the wrong standard in these matters. 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 DOJ and State Attorney General are taking an overly aggressive interpretation in their enforcement of antitrust law in this area. eBay will vigorously defend itself."

Whitman left eBay in 2008 to run an unsuccessful campaign for governor of California and joined Hewlett Packard as CEO last year. The DOJ said Intuit had already settled the matter.

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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