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December 11, 2012 > Lawsuit against eBay for anti-competitive hiring agreement

Lawsuit against eBay for anti-competitive hiring agreement

Submitted By the Office of the State Attorney General

Attorney General Kamala D. Harris filed a lawsuit on November 16, 2012 against eBay for entering into a "handshake" hiring agreement with Intuit that prohibited the company from recruiting and hiring one another's employees.

The complaint alleges that from 2006 to 2009, the agreement between senior executives at both corporations prevented employees from seeking potentially better-paying positions. The companies passed on talented employees because of their anti-competitive agreement.

"The pact harmed employees and competition," said Harris. "If California is to continue to be the high-tech capital of the world, we can't allow anti-competitive conduct that prevents talent from going where it's put to its highest use."

The complaint filed by Harris alleges that senior executives at eBay entered into a "no-poach" agreement to restrict their ability to recruit and hire employees of the other company. Intuit is being named a co-conspirator. The agreement prohibited either company from soliciting one another's employees for employment opportunities and, for more than a year, prevented eBay from hiring any employees at all from Intuit.

The agreement was enforced at the companies' highest levels. The complaint alleges that emails exchanged between eBay's CEO and Intuit's founder and chairman detail their intention not to recruit or hire one another's employees. Harris' complaint alleges the agreement violated California's Unfair Competition Law, the Sherman Anti-Trust Act and the Cartwright Act.

The California Justice Department worked closely with the U.S. Department of Justice (DOJ) on this matter. The U.S. DOJ has also filed a case against eBay for their "no poach" agreement and already has an injunction in place against Intuit relating to a similar agreement Intuit reached with other companies. Harris' separate lawsuit, however, is significant because it seeks to enforce California laws which contain stronger protections than federal law against anti-competitive conduct.

California seeks to recover damages for each act of unfair competition and injunctive relief to prevent recurrence of any such agreement.

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