In December 2010, our restrictive covenant group blogged about the Department of Justice’s complaint against Adobe, Apple, Google, Intel, Intuit, and Pixar. In that complaint, the DOJ alleged that those companies entered into agreements in which they agreed not to solicit each other’s highly skilled technical employees in violation of antitrust law. In the wake of that complaint, we recommended paying particular attention to any no-hire agreements to make sure that they do not draw unwanted scrutiny from the Department of Justice.
More than 18 months later, some of those companies continue to experience the negative ramifications of that attention. On Friday, Google asked the United States District Court for the Northern District of California to dismiss another lawsuit (Santiago v. Intuit Inc., et al.; case no. 12-cv-1262) filed concerning those agreements. In that case, a former Intuit employee filed a class action alleging that these no-hire agreements limited the employment options available to Intuit employees and allowed Intuit to depress wages. This continued litigation serves as a reminder to carefully consider both the costs and benefits of any no-hire agreements.