US court approves eBay settlement over no-hire agreement

EBay was charged with entering into an agreement with Intuit to limit competition for employees

A court in California has approved a settlement reached earlier this year between eBay and the U.S. Department of Justice over a deal the e-commerce company is said to have reached with Intuit not to hire each other's employees.

Under the settlement proposed in May and cleared Tuesday by District Judge Edward J. Davila of the U.S. District Court for the Northern District of California, San Jose division, eBay is prevented for five years from entering into or maintaining agreements with other companies that restrain employee recruitment and hiring.

The settlement also prohibits "....pressuring any person in any way to refrain from hiring, soliciting, cold calling, recruiting, or otherwise competing for employees of the other person," according to the court order.

The DOJ had charged that senior executives and directors of eBay and Intuit entered into an agreement, beginning no later than 2006, that prevented each firm from recruiting employees from the other and that prohibited eBay from hiring Intuit employees that approached eBay.

California Attorney General Kamala Harris announced a related settlement in May with eBay, with the company agreeing to pay restitution and civil penalties of nearly US$3.8 million, including $300,000 to the state for the harm to the state's economy.

EBay could not be immediately reached for comment on the approval of the settlement.

The DOJ's Antitrust Division filed a civil antitrust lawsuit in September 2010 against Adobe Systems, Apple, Google, Intel, Intuit, and Pixar for antitrust violations arising from agreements that put each firm's employees off-limits to the other companies, with instructions to recruiters not to "cold call" these employees. It filed later in the year a similar lawsuit against Lucasfilm on similar charges of anticompetitive hiring practices. The DOJ settled both suits at time of filing the lawsuits. The lawsuit against eBay was filed in 2012.

The employees of the companies, however, held that the DOJ put an end to the allegedly illegal agreements, but the government was unable to compensate the victims of the conspiracy, which was the reason why they were filing a class action suit.

Judge Lucy H. Koh of the California court rejected last month a proposed settlement in the class-action lawsuit, observing that the $324.5 million amount being offered by remaining defendants Apple, Google, Intel and Adobe is too low. The other defendants have settled with the employees.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

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