eBay sued on Intuit agreement by California Govt. & Justice Dept.

eBay had a ‘recruitment agreement’ with Intuit from 2006-2009. During this period, Scott Cook, founder of Intuit, was in the board of eBay. Apparently, he was critical regarding the poaching of Intuit employees by eBay. So to avoid any further friction between the two companies, Meg Whitman, then CEO of eBay and currently CEO of HPQ (Hewlett Packard co), and Cook formulated the agreement.

eBay

According to eBay, the agreement was very much in line with the standards of DOJ (Department of Justice) and it has done nothing wrong. They also assert that the Govt of California and DOJ, both suing the company, are wrongly targeting the company with the antitrust law.

According to DOJ’s claims, eBay and Intuit had agreed not to hire each other’s employees, even if they applied on their own. Even if there was an opening, one company was to simply thrash the resume sent by the other’s employee and this agreement was forged at the highest level of both companies.

This, according to DOJ, is a direct violation of antitrust laws and deprived the people from seeking a better job opportunity, and led to lower salaries and fewer benefits. DOJ believes that such a practice leads to anticompetitive environment. Which has been refuted by an eBay employee by stating that the position sought were not limited only in eBay and that there were many companies offering the same, so it didn’t really effect the competition.

Intuit isn’t named in any of the complaints as it has already solved all the recruitment issues with the govt in 2010 by signing a settlement agreement. At that time there were 5 other companies involved in a class action and all had signed the same agreement Adobe Systems, Apple, Google, Intel and Pixar. In fact, Intuit has agreed to comply with the California Attorney General’s investigation. So it leaves eBay against the govt and the DOJ.

[This post has been written by Sudarshan Rangarajan]

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