By Dan Levine
SAN FRANCISCO, Sept 27 A U.S. judge on Friday
refused eBay's attempt to dismiss a U.S. Department of
Justice civil lawsuit over its alleged agreement with Intuit to
refrain from recruiting each other's employees.
In a tandem order, U.S. District Judge Edward Davila in San
Jose, California, granted eBay's motion to dismiss a parallel
lawsuit brought by the state of California.
Representatives for eBay and the California attorney
general's office could not immediately be reached for comment.
The suit, and similar legal issues involving other
technology companies, highlight the intense competition for
talent in Silicon Valley.
A "handshake" agreement between eBay and Intuit came into
place in 2006 and involved executives including then-eBay chief
executive Meg Whitman and Intuit founder Scott Cook, according
to court documents. At the time, Cook was serving on eBay's
board and complained about eBay poaching Intuit employees.
Federal and state antitrust regulators sued eBay last year.
Intuit was not named as a defendant because it was already part
of a wide-ranging 2010 lawsuit that federal officials brought
against six technology companies, including Apple and
Google. The companies agreed to a settlement agreement
with the government that federal officials call sufficient to
prevent similar conduct in the future.
In its motion to dismiss, eBay argued that the government's
lawsuit must fail because it solely reflects conversations
between eBay and Cook. Since Cook was an overlapping director of
both companies, eBay argued that the government could not allege
a conspiracy between two separate entities.
However, Davila ruled that the government has "plausibly"
alleged an actionable agreement between both companies. In a
separate order, Davila ruled the state of California did not
have legal standing to pursue claims against eBay.
The cases in U.S. District Court, Northern District of
California are United States of America vs. eBay, 12-5869, and
the People of the State of California vs. eBay, 12-5874.