United States v. eBay, Inc.

United States v. eBay, Inc.

Opinion

 [*1032]  ORDER DENYING EBAY'S MOTION TO DISMISS THE UNITED STATES' COMPLAINT

Presently before the court in these antitrust actions is Defendant eBay Inc.'s ("eBay") Motion to Dismiss Plaintiff the United States of America's ("United States") Complaint. No. 12-CV-05869 Dkt. No. 15. eBay has also moved to dismiss Plaintiff the People of the State of California's ("California")  [**2] (collectively with the United States, "Plaintiffs") Complaint in related action No. 12-CV-05869. The court held a hearing on these matters on April 26, 2013. Having reviewed the parties' briefing and heard the parties' arguments, and for the following reasons, the court DENIES eBay's Motion as to the United States' Complaint.

I. BACKGROUND

a. Factual Background

This case concerns an alleged handshake agreement struck and occasionally refined by eBay executives, including then-CEO Meg Whitman, and Scott Cook, the founder and Chairman of the Executive Committee of Intuit, Inc. ("Intuit"), which restricted eBay and Intuit's ability to recruit or hire candidates from one another. The two complaints' factual allegations largely mirror each other. Accordingly, the following factual background is taken solely from the United States' Complaint and is assumed to be true for purposes of these  [*1033]  Motions. See No. 12-CV-05869, Dkt. No. 1.

In November 2005, eBay's then-COO Maynard Webb wrote to Mr. Cook about a potential hire from Intuit who had contacted eBay regarding a job. Id. at ¶¶ 12, 15. Mr. Webb proposed a going-forward policy under which eBay would not actively recruit from Intuit, would give  [**3] Intuit notice before making offers to senior-level Intuit employees who had initially contacted eBay, and would inform Intuit after lower-level employees had accepted offers from eBay. Id. Mr. Cook objected to the proposal to the extent it allowed any hiring of Intuit employees without prior notice to Intuit, explaining that "we don't recruit from board companies, period" and "[w]e're passionate on this." Id. at ¶ 15. Mr. Cook committed that Intuit would refrain from making an offer to any eBay employee without prior notice to eBay and stated that "[w]e would ask the same." Id.

According to Plaintiffs, eBay and Intuit reached and implemented an initial no-solicitation agreement by August 2006. Id. at ¶ 17. At that time, eBay was considering hiring an Intuit employee to its Paypal subsidiary. When approached about this hire, Beth Axelrod, eBay's Senior Vice President for Human Resources at the time, stated that while she was "happy to have a word with Meg [Whitman] about it," she was "quite confident [Ms. Whitman] will say hands off because Scott [Cook] insists on a no poach policy with Intuit." Id. Ms. Axelrod went on to confirm with Ms. Whitman that eBay in fact could not proceed with  [**4] the hire without first notifying Mr. Cook. Id. eBay discontinued recruitment of that candidate, apparently because "everyone agreed 'that it's to[o] awkward to call Scott [Cook] when [they] don't even know if the candidate has interest." Id.

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