EBay sued over anti-competitive hiring practices
US Justice officials allege do-not-hire deals with Intuit
EBay Inc has fallen foul of US federal and Californian antitrust regulations over an alleged do-not-hire agreement with tax and financial software specialist Intuit Inc, Bloomberg reported.
Senior executives at the two firms are said to have entered a practice of handshake deals between 2006 and 2009, in which they restricted the recruiting of one another's employees, thereby disrupting the free flow of labour and preventing workers from obtaining higher-paid jobs, according to a complaint filed by the US Justice Department yesterday in federal court in San Jose, California.
"This agreement harmed employees by lowering the salaries and benefits they might otherwise have commanded, and deprived these employees of better job opportunities at the other company," the filing said.
The state of California made a similar filing in the same court yesterday, but Intuit was not named as a defendant in either case.
As part of an antitrust settlement, California-based Intuit, which makes Turbo Tax and Quick Books, agreed in 2010, along with other tech companies including Apple and Google, to refrain from the practice of cold-calling rivals' employees in an effort to lure them away. All companies escaped fines by signing the agreement.
EBay vowed to fight the lawsuits, which it described as "wrong".
"EBay Inc strongly believes that the Department of Justice and California Attorney General are wrong and are using the wrong standard in these matters," Lara Wyss, a company spokesman, said in an e-mailed statement.
"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."
Meg Whitman, current president and CEO of Hewlett-Packard and a former candidate for the governorship of California, was chief executive of EBay at the time of the alleged practices. Both she and Scott Cook, founder and chairman at Intuit are accused of being "intimately involved" in the formation of the practices, which initially covered the direct solicitation of senior managers, but was expanded to placate Cook who sat on EBay's board at the time. Whitman left EBay in 2008 and joined HP in 2011.