eBay will pay restitution to the state of California as part of a settlement reached with the state and with the U.S. Department of Justice in a “no poach” hiring lawsuit. U.S. Assistant Attorney General Bill Baer had harsh words for eBay’s former CEO and other companies with whom the agency has settled.
On a conference call to discuss the settlement, Baer stated, “In our lawsuit we alleged that executives at the highest level of eBay and Intuit, including eBay’s former CEO Meg Whitman and Intuit’s founder and executive committee chair Scott Cook, entered into an agreement that prevented the companies from recruiting employees from each other and, for a time, prevented eBay from hiring any Intuit employees. The behavior was blatant and egregious.”
The DOJ said the alleged agreement between eBay and Intuit diminished important competition between the firms to attract highly skilled technical and other employees, to the detriment of affected employees who had less access to better job opportunities and higher pay.
Baer said the alleged agreement between eBay and Intuit was fully documented. “In one email, eBay’s senior vice president of HR wrote Meg Whitman complaining that while eBay was adhering to its agreement not to hire Intuit employees, “it is hard to do this when Intuit recruits our folks.” Turns out that Intuit had sent a recruiting flyer to an eBay employee. Whitman forwarded that email to Scott Cook asking him to “remind your folks not to send this stuff to eBay people.” Cook quickly responded with “…Meg my apologies. I’ll find out how this slip up occurred again…”
In a statement provided to EcommerceBytes, eBay acknowledged the settlement and said, “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.” And, it said, “eBay competes aggressively to attract and retain the best talent, while conforming to the hiring practices standards established by the Department of Justice in prior hiring-related cases against other companies. Any hiring practices or decisions that could have raised concerns with the Department of Justice ceased years ago, as evidenced by the fact that Intuit signed a consent decree with the Department of Justice in 2010.”
As part of the proposed settlement, eBay would pay $250,000 in civil penalties and $3.5 million into a settlement fund, which would include $300,000 to the state “for the harm the anticompetitive conduct caused to the state’s economy.”
The proposed settlement would also prohibit eBay from entering or maintaining anticompetitive agreements relating to employee hiring and retention for five years. It would broadly prohibit eBay from entering, maintaining or enforcing any agreement that in any way prevents any person from soliciting, cold calling, recruiting, hiring or otherwise competing for employees. eBay would also implement compliance measures tailored to these practices. Intuit is already subject to a similar consent decree, and for that reason was not a defendant in the case.
The DOJ’s Antitrust Division filed the proposed settlement in the U.S. District Court for the Northern District of California in San Jose. If approved by the court, the settlement would resolve the department’s competitive concerns and the original lawsuit filed in 2012.
This case and the proposed settlement arose out of a series of Antitrust Division investigations into employee recruitment practices at a number of high tech companies, including Adobe, Apple, Google, Intel, Intuit and Pixar.