SAN FRANCISCO -- Attorney General Kamala D. Harris today announced a nearly $4 million settlement with eBay over allegations the company violated state anticompetitive laws by making a “no-poach” agreement with Intuit between 2006 and 2009.
“California’s technology sector is at its best when competition and creativity are allowed to thrive,” Attorney General Harris said. “No-poach agreements unfairly punish talented workers and stunt our state’s economic growth. This settlement compensates employees, demands improved future hiring practices, and refunds the state for economic harm.”
In November 2012, Attorney General Harris filed suit against eBay and named Intuit as a co-conspirator, alleging that from 2006 to 2009 senior executives at both companies entered into a “no-poach” agreement restricting each company’s ability to recruit employees from the other company; in addition eBay agreed not to hire Intuit employees. As a result, employees of both companies were prevented from securing potentially better-paying positions and both companies lost the ability to hire qualified employees.
Attorney General Harris' complaint alleged that the agreement violated California’s Unfair Competition Law, the federal Sherman Anti-Trust Act and the state Cartwright Act.
Today’s settlement, filed in United States District Court for the Northern District of California in San Jose, includes restitution payments and civil penalties totaling $3.75 million and commitments from eBay regarding the company’s future hiring practices.
eBay will pay $3.5 million into a settlement fund, which will include a $300,000 to the state for the harm the anticompetitive conduct caused to the state’s economy, which is the first time a state antitrust settlement has explicitly recovered additional funds for general harm to the economy.
A portion of the settlement fund will be used to pay restitution to individuals employed in California by eBay or Intuit since 2005. Restitution payments will be made to three distinct pools of current and former employees. The first pool of approximately forty individuals who were employed by Intuit and considered for but not offered a position at eBay, will receive between $5,000 and $10,000 each. The second pool of approximately 950 individuals who were employed by Intuit and applied for but were not offered a position at eBay, will receive between $1,000 and $1,500 each. The third pool includes current and former employees who fall within the terms of the settlement but are not included in the first or second pool. While these individuals did not apply for jobs at the other company, they may have been indirectly affected by the anticompetitive conduct and will receive a maximum payment of $150.
In addition, eBay will pay $250,000 in civil penalties.
eBay has also agreed to not participate in a similar “no-poach” agreement in the future and for the next five years, the company must provide the California Attorney General’s office with an annual report describing any violation or potential violation of this settlement.
eBay must also provide annual information for the next five years about the meaning and requirements of this settlement to officers, directors, human resources managers and senior managers who supervise employee recruiting, solicitation, or hiring efforts.
Within ninety days following the court’s preliminary approval of the settlement, current and former employees who are potential members of the three pools will receive an email and a letter providing information on how to submit a claim for restitution.
In July of 2013, Attorney General Harris reached a settlement with Intuit over its alleged conduct.
The U.S. Department of Justice today also reached a settlement with eBay over these allegations.
A copy of documents related to this settlement can be found attached to the electronic version of this release at: oag.ca.gov/news.