eBay's No-Poach Deals Called Bad for Business

     SAN FRANCISCO (CN) - California fired back at eBay's motion to dismiss the state's antitrust claims over an alleged "handshake" agreement with Intuit not to recruit one another's employees, saying the online auction house's refusal "to even admit its behavior" portends future antitrust injury to the state.
     "eBay's current refusal to repudiate its past behavior makes future injury more likely. eBay's refusal to even admit its behavior is inappropriate further increases the risk of that injury to citizens of California," the state's opposition stated.
     "eBay has not indicated it ceased (nor has any need to cease) entering into no-poach agreements to avoid competing for employees," California Attorney General Kamala Harris argued in her opposition. "eBay has never admitted that its agreement with Intuit is problematic in any way - a position it maintains in its current motion to dismiss. While its co-conspirator Intuit is bound by a consent decree, eBay itself is not subject to any judgment or consent decree that requires it to cease such behavior in the future. eBay's view is that such agreements do not violate the antitrust laws. The fact that eBay has not disavowed such actions makes a future threatened loss or injury more likely."
     EBay faces separate lawsuits by federal regulators and Attorney General Harris for agreeing with Intuit not to hire one another's employees from 2006 through 2009.
     California has demanded the injunction in a second amended complaint that it filed after U.S. District Judge Edward Davila dismissed its first attempt on Sept. 27.
     In a recent motion to dismiss, eBay said the state has no reason to believe that eBay is continuing to enforce a no-solicitation agreement.
     But Harris pointed to eBay's 2011 lawsuit against Google over former eBay employee and current Google Senior Vice President Stephanie Tilenius's alleged violation of an agreement not to recruit eBay or PayPal employees for one year after she left eBay.
     "eBay's 2011 lawsuit against Google regarding another no-poach agreement demonstrates eBay's history and pattern of imposing anti-competitive, anti-employee agreements. It is not only possible but likely for eBay to do so in the future unless this court enjoins eBay from taking such actions," she said. "eBay's agreement with Intuit is not a one-time event, nor is eBay's lawsuit against Google an unrelated matter that should be ignored. If eBay enters into any other agreements of this type in the future, that agreement would also be closely related to the eBay-Intuit agreement in both concept and purpose. These future threats can be prevented with an injunction from the court."
     Harris also urged that the case's state law claims remain in federal court, even if the court dismisses its Sherman Act claim. "The circumstances of the case at bar strongly favor the court exercise of supplemental jurisdiction over California's state law claims," Harris said. "This court continues to have an active matter - the related case United States v. eBay. If the court dismisses the supplemental claims then both cases will proceed in separate courts, inefficiently using the resources of both courts in order to try cases that are fundamentally similar, if not the same."