Tuesday, November 20, 2012

Department of Justice Sues EBay Over No-Poaching Agreement With Intuit

Last week, the Department of Justice filed another suit against one of the nation's tech giants for entering into horizontal no-hire agreements. This time the suit is against EBay, and it generally alleges that EBay and Intuit engaged in an informal and formal contract not to hire each other's key employees.

The DOJ has sued under the Sherman Act, claiming that the no-hire agreement is both illegal under a per se and rule of reason analysis. Though the suit is pending in California - a state with a well-known and broad policy against enforcement of non-competes - the California law receives only one passing mention in the complaint. And the state public policy would appear not to have any impact on the Sherman Act analysis.

It is not clear what the imminent harm is, or whether EBay and Intuit have continued their understanding not to hire each other's people, however informal that understanding may have been. The DOJ had obvious access to e-mail communications and probably gained them from another suit that it brought in California federal court against other tech companies.

Intuit is not a defendant, as it is under an agreed order in a similar case. A copy of the Complaint is contained below.

US v. eBay, Inc.

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