EBay settles with U.S. over pact to not poach employees

WASHINGTON Fri May 2, 2014 1:10am IST

An eBay logo is projected onto white boxes in this illustration picture taken in Warsaw, January 21, 2014. Reuters/Kacper Pempel/Files

An eBay logo is projected onto white boxes in this illustration picture taken in Warsaw, January 21, 2014. Reuters/Kacper Pempel/Files

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WASHINGTON (Reuters) - The online commerce company eBay Inc (EBAY.O) has agreed to refrain from making deals with other technology companies to not poach each others' employees and by doing so limit workers' access to better jobs, U.S. authorities said on Thursday.

EBay had been accused by the Justice Department of reaching an agreement with Intuit Inc (INTU.O), a software company best known for its tax preparation programs, to not recruit from each other.

"EBay's agreement with Intuit served no purpose but to limit competition between the two firms for employees, distorting the labor market and causing employees to lose opportunities for better jobs and higher pay," said Bill Baer, assistant attorney general for antitrust at the U.S. Department of Justice.

The lawsuit, and similar legal issues involving other technology companies, highlight the intense competition for talent in Silicon Valley. In this case, eBay and Intuit reached a "handshake" agreement in 2006 involving executives including then-eBay chief executive Meg Whitman and Intuit founder Scott Cook, according to court documents. At the time Cook, who was serving on eBay's board, complained about eBay poaching Intuit employees. Whitman is now chief executive at Hewlett-Packard Co (HPQ.N).

Federal and state antitrust regulators sued eBay in 2012.

Intuit was not named as a defendant because it was already part of a wide-ranging 2010 lawsuit that federal officials brought against six technology companies, including Apple (AAPL.O) and Google (GOOG.O). Those companies settled. California also settled on Thursday with eBay, which agreed to pay the state $3.75 million to compensate people who were hurt by the no-poach agreements, among other costs.

EBay admitted no wrongdoing. It said in a statement that it believed 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."

"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," the company added in the statement.

Asked about the eBay statement that it broke no laws, Baer told reporters: "We have no doubt that this was problematic conduct that violated the antitrust laws."

EBay's share price was little changed at $51.89 and Intuit was up about 0.2 percent at $75.92 in afternoon trading.

(Reporting by Diane Bartz; Additional reporting by Dan Levine; Editing by Ros Krasny, Doina Chiacu, Sandra Maler and Chizu Nomiyama)

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