US adds eBay to accused firms in 'poaching' probe (Update)

Nov 16, 2012
US authorities sued online retail giant eBay Friday, claiming it was part of a conspiracy with software maker Intuit to refrain from hiring each other's employees to keep salaries under control.

US authorities sued online retail giant eBay Friday, claiming it was part of a conspiracy with software maker Intuit to refrain from hiring each other's employees to keep salaries under control.

The civil antitrust lawsuit said eBay violated antitrust laws in an agreement not to recruit or hire Intuit employees, the Justice Department said.

The suit claims then-eBay chief executive Meg Whitman and Intuit founder Scott Cook agreed to the plan, which "deprived these employees of better job opportunities."

eBay denied any violations and pledged to contest the lawsuit.

Officials said it was not necessary to name Intuit in the complaint because the company had previously been named in a September 2010 lawsuit and settlement, which bars Intuit from entering into these types of agreements.

In the earlier case, the Justice Department's Antitrust Division filed suit against six big tech firms—Adobe Systems, Apple, Google, Intel, Intuit and Pixar—over a series of bilateral agreements not to solicit each other's employees.

All six companies entered into a settlement that prohibited them from these practices.

The eBay case grew out of the same investigation.

Officials said the eBay-Intuit agreement "was enforced at the highest levels of each company," and barred either firm from soliciting each other's employees, and for over a year barred eBay from hiring any Intuit employees at all.

The suit alleges that Whitman, then eBay's CEO, and Cook, Intuit's founder and executive committee chair, were "intimately involved in forming, monitoring and enforcing the anticompetitive agreement," a Justice Department statement said.

California Attorney General Kamala Harris filed a similar lawsuit in the state, saying the "handshake" hiring agreement harmed employees and competition.

"If California is going to continue to be the high-tech capital of the world, we can't allow anticompetitive conduct that prevents talent from going where it's put to its highest use," she said in a statement.

Lara Wyss, a spokeswoman for eBay, said the lawsuits "are using the wrong standard."

"We compete openly for talent in a broad, diverse global market across a range of industries and professional disciplines, and eBay's hiring practices conform to the standards that the Department of Justice has approved in resolving cases against other companies," Wyss said in a statement.

"The DOJ and state Attorney General are taking an overly aggressive interpretation in their enforcement of antitrust law in this area. eBay will vigorously defend itself."

A class-action lawsuit on behalf of affected employees is proceeding in California on the matter against Apple, Google, Pixar and others.

Explore further: Tech-industry perks long associated with Bay Area being replicated across LA

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User comments : 6

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IronhorseA
3.7 / 5 (3) Nov 16, 2012
Apparently companies are fine with the idea of supply and demand except when it comes to hiring employees. Then again, its hardly new behavior, after all that's what H1b visa's are for.
LuckyBrandon
2.3 / 5 (3) Nov 17, 2012
This has ALWAYS been the case. This is a very common practice amongst probably 80% of large companies.
210
2 / 5 (2) Nov 17, 2012
Apparently companies are fine with the idea of supply and demand except when it comes to hiring employees. Then again, its hardly new behavior, after all that's what H1b visa's are for.

Not quite. The H1B Visa let's one BRING a worker to the US. This story brings into focus the argument some companies use for outsourcing. Outsourcing lets a firm pay minimum wage for world class talent. Bringing them into the US means US tax revenue, pensions, etc, etc, etc. The H1B visa is not used to 'kidnap' a worker. They allow a talented individual who has the moxey to bring that skill to foreign shores. This 'poaching' limits the mobility, often UPWARD mobility of the indigenous often first world or US worker. You can be sure a hell of a lot more companies are doing this surreptitiously for sure! Further most firms that use the H1B visa are fairly large, have located N small to medium size communities and, or, cannot find specialized laborers so go offshore and get them.

word-to-ya-muthas
Caliban
1 / 5 (1) Nov 17, 2012
Not quite. The H1B Visa let's one BRING a worker to the US. This story brings into focus the argument some companies use for outsourcing.[...] small to medium size communities and, or, cannot find specialized laborers so go offshore and get them.


@210,

Not quite. You are being a little Pollyanna-ish in this assessment.

HB1 visas allow the importation of admittedly qualified workers. This has a drive-down effect upon compensation for every other worker in the same industry, native or HB1, because the HB1 worker is going to take whatever compensation is on offer(ditto for "poaching"), since it is obviously more than available at home --otherwise that worker wouldn't be looking for work overseas, yes?

And then there is the double-down, when this worker returns home, organizes others(many of them also former HB1s) and startup a business to compete with US business in a very low wage, unregulated offshore environment.

Further erosion of US worker standing.

A Death Spiral
210
1 / 5 (1) Nov 20, 2012
@Caliban
American firms, especially the high tech ones that are in a growth phase move to small-town or medium sized cities to get as close as they can to off-shore cost benefits and or negotiate tax incentives and other comp-packages with as many government components as they can meet.Some big states also learned this attraction trick, hence Silicon Valley. But this has the down side of moving them too far from scholastic population centers and or while trying to compete in vigorous foreign markets.
They need those software smarts and engineering brains and they cant wait forever for them to move to where the firm is or going to be. The H1B lets them bring talent in. Those who apply often command very good wages having the highest degrees offered in their fields, but they do not start at the highest wage, they work up. But the idea that they leave the US and start a Semiconductor Die with their friends in Bolivia, or a hard drive firm in their basements in Spain...nope!

word -
210
1 / 5 (1) Nov 20, 2012
@Caiban
"...a business to compete with US business in a very low wage, unregulated offshore environment. Further erosion of US worker standing. A Death"
A lot of American jobs have gone offshore...ask Bain Capital and Mitt Romney, FAMOUS for sending US jobs overseas. Jobs that leave the US leave...they become low wage because they go to developing economies and companies in even poorer economies feed on them in turn. But as for unregulated - one has to wonder whose regulation you are talking about? The US? Europe's? Try sending pirated goods into the US lately? Bogus semiconductors? Yeah a few got in, but it aint easy and nobody wants the fake stuff cause it does not last long or work as well. Yes the US worker faces pressure, but so are most workers in developed nations after these same developed nations poisoned their own financial wells! Wallstreet gambled and the US and the world, LOST! Poaching is another bean counter move hatched by your own people 2 hurt yur own people again!

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