Most American workers take it for granted that they can change employers at their discretion. This provides opportunity to seek better wages and benefits, as well as the chance to find more meaningful employment. At the same time, potential employers have the right to recruit new talent, sometimes aggressively, from competing firms.
However, many employers in California’s Silicon Valley seem to have taken exception to these facts. In the ultra-competitive technology industries, giants like eBay, Google, Pixar and Apple entered into agreements by which they promised their competitors not to poach talent. Acceptance of the agreement meant that the people at Intuit could not recruit a person with a desirable resume at eBay. The result; employees at these firms were denied access to opportunities that would have advanced their careers along with salary and prestige.
The U.S. Justice Department took exception to these agreements, charging that they created an anticompetitive atmosphere. The Department filed lawsuits against several companies that participated in these agreements. Many of these lawsuits have already been settled, with eBay being the latest company to do so.
The settlement does not require eBay to admit to any wrongdoing. In fact, counsel for eBay insists that the agreements were “acceptable and legal.” However, Assistant Attorney General Bill Baer says “the behavior was blatant and egregious.” Under the terms of the settlement, eBay may not enter into any similar agreements for a period of five years. The company also reached a settlement with the California Attorney General in which it is liable to pay $3.75 million to workers at eBay and Intuit who may have been adversely affected by the recruitment freeze. The settlement in the Justice Department lawsuit is still pending approval by the court, which is expected to happen soon.
The Justice Department began investigating recruitment and hiring practices at Silicon Valley firms several years ago. As a result, a massive class action lawsuit that represents more than 60,000 employees has also been filed. Many years will likely be required before all of the lawsuits have been settled.
Sylvester, Oppenheim & Linde represents businesses and their owners in most types of litigation. If your business has a legal problem, contact Richard Oppenheim directly for a prompt, no charge initial consultation. You may use the contact form in the left column or call 818-461-8500.