US Justice Dept. Sues eBay For Anti-Competitive Hiring Practices

McGruber writes "The Associated Press is reporting that the U.S. Justice Department is suing eBay for allegedly agreeing with Intuit not to hire each other's employees. According to the article, 'eBay's agreement with Intuit hurt employees by lowering the salaries and benefits they might have received and deprived them of better job opportunities at the other company,' said acting 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.'"

Comments

Quickbooks User Here

[Anonymous Coward]

As a software developer and QuickBooks user I can assure you that no one should hire the Intuit guys anyway.

Re:Quickbooks User Here

[Anonymous Coward]

And as a former eBay employee, I can assure you that no one is deprived by not working for them.

Is this the same for "contractor" companies?

[Anonymous Coward]

IBM uses contract employee companies like CDI for disposable employees. CDI and IBM have agreements that limit CDI employee's ability to apply for other positions within CDI and IBM. Would these agreements be illegal as well?

Re:Is this the same for "contractor" companies?

[AaronLS]

Maybe not in the case of CDI/IBM, but otherwise contractors working for the government cost 2x what it would cost them for direct hire(including benefits). They just want the freedom to increase/decrease workforce as needed. It gets around alot of red tape as well in terms of both hiring/firing. If there is a hiring/pay freeze instituted at the state level, but your agency has enough money to hire needed employees, then pay for "services" of an agency. What's ironic is the blindly broad hiring/pay freeze results in agencies wasting money in this case.

Re:Is this the same for "contractor" companies?

[Austerity Empowers]

This happens all the time though, in fact frequently these positions are marketed to contractors as "contract to hire" (not that it usually happens, that's just a gimmick, I think I saw one contractor turned in 7 years, most are removed and replaced in 1.5 years). The company with the job just wants a disposable employee with a side effect of try-before-you-buy, the employee just wants a job, and the contracting company wants a piece of the action.

It seems to me that it's perfectly acceptable for you to leave the contract house and go to the employer if offered the position. No one is being bankrupted by this, if anything the entire existence of the contracting house to begin with is shady: employer finds our legal system to be inconvenient to their hiring practices, contract house offers a loophole around the laws, employee usually wants a full time position but will take a paycheck however offered.

Finally, if the contracting house keeps digging up full time employees, they will be seen as a valuable resource by HR and their services sought more often. I don't know about you, but my job doesn't give me a lot of time to shop around. I rely on suppliers to provide a service and want to spend as little time on the finding as I can. If I find one that's great, I keep using them. If they fail me, I shop around.

Re:Is this the same for "contractor" companies?

[Chuckstar]

The eBay/Intuit agreement (and the other similar agreements that were subject to a settlement a few years ago) were very broad in scope. It might be the breadth that is the issue.

I know, for instance, that it is legal for a company to agree not to solicit employees of another company for a defined period of time. This is often done as part of M&A transactions, where a company is buying a subsidiary of another company, and doesn't want the seller to just turn around and hire back key personnel. But those are limited in time. Also, the ones I've seen do not limit the ability to hire those people, only the ability to solicit them. So if the employee makes the first contact, all bets are off.

Another agreement I've seen often is as part of a M&A confidentiality agreement. Example: "You will provide us information about your company and access to key personnel in order to discuss a potential aquisition, in exchange, we agree not to solicit any of those employees for one year."

The eBay/Intuit agreement, however, is that they will not hire each others' employees for as long as the agreement remains in effect AND that it doesn't matter whether the employee approaches them first.

latin lessons

[_peter]

per se -- in itself
prima facie -- on it's face

Further reading...

[guttentag]

TFA is a little thin. For those of you just joining us (stares pointedly at Intuit and Ebay, with a glance at HP), it's called "collusion."

Collusion
Collusion is an agreement between two or more persons, sometimes illegal and therefore secretive, to limit open competition by deceiving, misleading, or defrauding others of their legal rights, or to obtain an objective forbidden by law typically by defrauding or gaining an unfair advantage. It is an agreement among firms to divide the market, set prices, or limit production. It can involve "wage fixing, kickbacks, or misrepresenting the independence of the relationship between the colluding parties". In legal terms, all acts affected by collusion are considered void.

Collusion is largely illegal in the United States, Canada and most of the EU due to competition/antitrust law, but implicit collusion in the form of price leadership and tacit understandings still takes place.

Also known as the opposite of competition, or incompatible with a competitive environment, or simply "anti-competitive."

B B But...

[whoever57]

But I thought Meg was in favor of a free market! Just not for employees I suppose. Apparently what's good for the goose is not good for the gander.

Re:B B But...

[ultranova]

I find most libertarians are only in favor of the freedoms they personally like.

All libertarians are only in favor of the freedoms they personally like, otherwise they'd be called anarchists (the state doesn't interfere with anything -> for all intents and purposes the state does not exist).

Also, at least on Slashdot libertarianism seems to mean a pro-corporate and anti-union position (corporations may collude, workers may not), so it's hard to avoid the conclusion that it's less about a coherent ideology and more about propaganda appealing to people's egos to get them to act against their own interests - after all, everyone is better than average at their job, the same way that everyone is better than average at driving, and would thus be "limited" by an union.

Intuit is a Veteran!

[guttentag]

Intuit was sued by the DOJ before for this, and along with Apple, Google, Intel and Pixar, reached a settlement with DOJ and agreed in 2010 to stop doing this. Of course, TFA says the collusion in question took place from 2006 to 2009, so I'm thinking they've already covered this. Unless they kept their collusion with eBay a secret at the time, so it's not covered by the settlement, and now DOJ is going to kick them in the pants for not coming clean about all of their illegal activities and partners. My guess is that now DOJ is going to be on a fishing expedition to find out what other collusion Intuit was hiding.

Re:Unions

[Austerity Empowers]

You mean the agreements explicitly agreed to between union management and corporations? Or the agreements explicitly agreed to between union management and employees? As far as I know, with the exception below, union employees are free to leave their union and sign up, there's nothing legally stopping them (caveat: there are some social issues).

Trying to figure out which of these is as unethical as two people agreeing not to hire a third person without his consent.

There is one place I may see your point on: the existence of "closed shops". That definitely needs to be attacked (and is illegal in many places). There should never be a closed shop, everyone should have the right to apply for a job. If the union is doing ITS job, employees will pay their dues and join. If management is doing ITS job, employees have no need of a union.

I hope will also sue Ebay for stealing money

[iamjakob]

Ebay steals money from its sellers. I hope DOJ will take notice of this and sue Ebay. I know someone who did nothing wrong but was accused by Ebay of doing something illegal. Consequently, they stole all the proceeds of his sale on Half.com

This is news?

[Virtucon]

Where has the DOJ been? Oh that's right going after states who pass voter id laws all the while the AG grand stands and panders to ever special interest in the country instead of enforcing our laws. Now they can go after bigger fish and say "hey, lookie what we got right chere!" Yeah, you got two lame ducks. EBay and Intuit? Come on you may as well have gone after Hostess and Wonder Bread. Oh wait, Hostess is out of business now anyway, so they won't put up much of a fight with the DOJ.

American Airlines, IBM, HP (and the former EDS) and many others, all of them do this and now they're making a point out of EBay and Intuit? Wow, this seems like so 10 years ago when both of these entities mattered. The collusion is rampant and it's meant to keep wages low and remove options for people.

So here's how it'll play out, the DOG will go to court and lambaste these two titans of industry (I'm still laughing) They'll rail against these companies and make really good press for a couple of weeks. Then they'll reach a settlement deal and EBay and Intuit will pay a fine and say "we're sorry and won't do it again." Yeah right. As long as nobody gets caught and held truly accountable for this kind of crap, it will keep on happening

Then again you have a right to work wherever you want and they have a right to fire you whenever they want. It's the American way.

This makes no sense

[dadioflex]

I don't even see how there could be a conflict. One is an internet company and the other mainly hunts seals and whales for meat.

Re:I'm confused

[Psychotria]

I'm confused, is this different from non-competes? I thought non-competes where standard practice in a lot of area's of business. Sorry for my ignorance

And non-competes are generally illegal as well.