November 19, 2012—eBay just can’t seem to keep their name out of the headlines of late. On Friday, the U.S. Justice Department and State of California accused eBay and former CEO Meg Whitman of making an anti-competitive agreement that barred eBay and Intuit from hiring each other’s employees. The state and Justice Department announced last week they are suing the company over illegal emails sent between Meg Whitman and Intuit CEO Scott Cook.
According to the lawsuit filed in court, the federal government claims the eBay and Intuit CEOs entered into an “illegal agreement” between 2006 and 2009 that prevented the companies from poaching employees from each other’s workforces. The deal allegedly instructed eBay’s recruiting personnel to not pursue potential applications that came from Intuit and to throw away such resumes.
eBay rejected the allegations over the weekend and denied any wrongdoing in its hiring practices, calling the state and federal lawsuits “wrong.” However, the lawsuit specifies Meg Whitman and Intuit founder Scott Cook “were intimately involved” in enforcing the “anticompetitive agreement.” Bloomberg obtained a copy of the lawsuit and wrote, “eBay initially sought a limited no-solicitation agreement aimed at high-level employees, and expanded it to “placate” Cook, who was on eBay’s board and had complained about eBay’s hiring practices.”
“eBay’s agreement with Intuit hurt employees by lowering the salaries and benefits they mighthave received and deprived them of better job opportunities at the other company,” said Assistant Attorney General Joseph Wayland, who is in charge of the Justice Department’s antitrust division. The division “has consistently taken the position that these kinds of agreements are per se (on their face) unlawful under antitrust laws.”
In 2008, Meg Whitman left eBay to run for governor of California and later became CEO of Hewlett Packard. Although Intuit was not named in Friday’s lawsuit, the two companies will face upcoming civil antitrust lawsuits on behalf of employees. In 2010, Intuit reached a settlement regarding the same allegations from a previous Justice Department antitrust case involving Adobe, Apple, Google, Intel and Pixar.