The U.S. Justice Department and the state of California sued EBay, the world's largest online marketplace, for an illegal agreement with Intuit to not poach each others' employees, which they allege violate antitrust laws. The Department of Justice (DOJ) argued that the secret agreement eliminated competition for workers and deprived them of access to better job opportunities and salaries.
Justice department filed its lawsuit in U.S. District Court in the Northern District of California, in San Jose after an investigation in collaboration with the Office of the Attorney General of the State of California. The lawsuit seeks preventing the e-commerce giant from adhering to or enforcing the agreement and from entering into any similar agreements with any other companies. The agreement was made between the highest levels of each company with which it barred either firm from soliciting each other's employees, and for over a year barred at least eBay from hiring any employees from Intuit at all.
"In court papers, the department alleges that Meg Whitman, then eBay's CEO, and Scott Cook, Intuit's founder and executive committee chair, were intimately involved in forming, monitoring and enforcing the anticompetitive agreement. Cook was serving as a member of eBay's board of directors at the same time he was making complaints about eBay's recruiting of Intuit employees," a press release from the Justice Department said.
The complaint alleges that eBay and Intuit entered an illegal agreement that restricted their ability to actively recruit employees from the other company, and for some period of time even restricted at least eBay from hiring any employees at Intuit. "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," said Joseph Wayland, Acting Assistant Attorney General in charge of the Department of Justice's Antitrust Division.
EBay refuted all the government allegations and strongly defended itself. "EBay's hiring practices conform to the standards that the Department of Justice has approved in resolving cases against other companies. The DOJ is taking an overly aggressive interpretation in their enforcement of antitrust law in this area," eBay representative Lara Wyss told Reuters.
