[Calif. AG] – Attorney General Kamala D. Harris filed a lawsuit Friday 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, senior executives at eBay and Intuit agreed not to recruit employees who worked for the other company, and eBay agreed not to hire any Intuit employees. As a result, employees of both companies were prevented from seeking potentially better-paying positions. The companies passed on talented employees because of their anticompetitive agreement.
“The pact harmed employees and it harmed competition,” said Attorney General Harris. “If California is going to continue to be the high-tech capital of the world, we can’t allow anticompetitive conduct that prevents talent from going where it’s put to its highest use.”
The complaint filed by Attorney General 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 over a year, prevented eBay from hiring any employees at all from Intuit.
The agreement was enforced at the highest levels of the company. The complaint alleges that emails exchanged between eBay’s chief executive officer and Intuit’s founder and chairman detail their intention not to recruit or hire one another’s employees.
Harris’ complaint alleges that the agreement between the companies 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 on this matter. The U.S. Department of Justice also has filed a case against eBay for their “no poach” agreement. The U.S. DOJ 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 against anti-competitive conduct than federal law.
California seeks to recover damages for each act of unfair competition, as well as injunctive relief to prevent any such agreement from occurring again.