Antitrust Division Sues eBay Over Non Solicitation Agreement

On November 16, 2012, the Antitrust Division filed a civil antitrust lawsuit against eBay Inc., alleging that it violated antitrust laws when it entered into an agreement not to recruit or hire Intuit Inc.'s employees.
The Antitrust Division's lawsuit was filed in the U.S. District Court in the Northern District of California, in San Jose. The lawsuit seeks to prevent eBay from adhering to or enforcing the agreement and from entering into any similar agreements with any other companies.

The Antitrust Division alleges that the eBay and Intuit entered into an illegal agreement restricting eBay's ability to recruit Intuit employees and Intuit's ability to recruit eBay's employees. The complaint alleges that the agreement began no later than 2006, and lasting at least until 2009. Allegedly, Meg Whitman, then eBay's CEO, and Scott Cook, Intuit's founder and executive committee chair, were responsible for forming the anticompetitive agreement.

On September 24, 2010, the Antitrust Division filed a lawsuit and entered into a settlement that prohibits six high-tech companies – Adobe Systems Inc., Apple Inc., Google Inc., Intel Corp., Intuit Inc. and Pixar – from entering into “no solicitation” or “no cold call” agreements for a period of five years. Because Intuit was part of that lawsuit and settlement, the Antitrust Division believed it was unnecessary to name Intuit in the eBay lawsuit. This eBay litigation grew out of the same investigation.

The Antitrust Division's enforcement action against eBay demonstrates its continued effort to challenge agreements between competitors to not solicit each others' employees without any pro-competitive justification. These types of agreements alleged in the complaint against eBay are considered per se illegal restraints of trade.

Andre Barlow
(202) 589-1834
abarlow@dbmlawgroup.com