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US accuses eBay of illegal no-hiring deal with Intuit

The two companies agreed not to poach each other's employees, the agency says in an antitrust lawsuit

By , IDG News Service
November 16, 2012 05:35 PM ET

IDG News Service - The U.S. Department of Justice has filed a lawsuit accusing eBay of entering into a "handshake" agreement to not recruit or hire employees of software maker Intuit.

The DOJ, in an antitrust lawsuit filed Friday, seeks to prevent eBay from enforcing the agreement or entering into similar agreements with other companies. The alleged hiring truce was a "naked restraint of trade" that harms tech workers by keeping their salaries down and limiting their employment options, the DOJ said in the lawsuit, filed in U.S. District Court for the Northern District of California.

The agreement was enforced at the highest levels of both companies, the DOJ alleged. The deal barred either company from soliciting each other's employees, and, for longer than a year, barred eBay from hiring any employees from Intuit, the agency alleged. Meg Whitman, eBay's former CEO, and Scott Cook, Intuit's founder and executive committee chairman, were involved in creating and enforcing the agreement, the DOJ alleged.

Cook served as a member of eBay's board of directors at the same time he made complaints about eBay's recruiting of Intuit employees, the DOJ alleged. The no-hiring deal began in about 2006 and lasted until 2009 or later, the DOJ said. During 2007, eBay executives told the company's recruiters to not pursue potential applications that came from Intuit and to throw away such resumes, the agency said.

EBay denied the allegations.

"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 company said in a statement. "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."A

A representative of Intuit didn't immediately respond to a request for comment on the antitrust charges.

In September 2010, the DOJ settled similar charges with Intuit, Google, Apple and three other companies. The agency accused several California tech companies of entering into agreements in which they wouldn't poach each other's employees. The eBay case grew out of the same investigation, the agency said.

The DOJ has "constantly taken the position" that these no-hiring agreements are illegal under U.S. antitrust laws, said Joseph Wayland, acting assistant attorney general in charge of the DOJ's Antitrust Division, in a statement.

Intuit and eBay are direct competitors for employees, including specialized computer engineers and scientists, the DOJ said.

The agency did not name Intuit in the new complaint because the company had previously been named in the September 2010 lawsuit and settlement, the DOJ said in a press release. The settlement should prevent Intuit from entering into these types of agreements, the agency said.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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