The Justice Department and the California Attorney General announced on Thursday that they have reached a settlement with eBay over the online auction site’s hiring practices.
The deal resolves a lawsuit filed in 2012 in which the governments accused eBay of violating anti-trust law as a result of its senior executives cutting a deal with financial software giant Intuit that called for each company to refrain from hiring the other’s employees.
Under the terms of the settlement, which must receive final court approval, eBay will agree not to enter in any agreements that forbids recruiters from hiring or cold calling its employees. Intuit has already agreed to a similar deal.
In a legal filing, the Justice Department notes that the state of California has also filed an agreement that will see eBay pay up to $2.675 million to individuals harmed by the anti-poach agreement, and for “harm to the state’s economy.”
A press release from California has further details on the amount, including “restitution payments and civil penalties totaling $3.75 million…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.” It adds that individual employees will receive between $1,000 and $10,000 each. eBay, meanwhile, disagrees that it did anything wrong.
“eBay continues to believe that the policy that prompted this lawsuit was acceptable and legal, and led to no anticompetitive effects in the talent market in which eBay competed,” said the company in a statement.
eBay is just the latest firm to face scrutiny over its hiring practices. Last week, four companies — Google, Apple, Adobe and Intel — agreed to pay $324 million to settle a class action suit that accused them of colluding not to hire each other’s employees.
State governments, meanwhile, are also taking a closer look at the legality of non-compete agreements in individual employment contracts. California law largely forbids such arrangements, and the governor of Massachusetts has indicated that his state may follow suit in order to retain tech talent.
Here’s a statement included in the Justice Department’s release:
“eBay’s agreement with Intuit served no purpose but to limit competition between the two firms for employees, distorting the labor market and causing employees to lose opportunities for better jobs and higher pay,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The proposed settlement resolves the department’s antitrust concerns and ensures that eBay will not engage in similar conduct in the future.”
This story was updated at 2 PM ET with details of the California settlement and at 4 PM with Hulu’s statement