Antitrust Division Sues Lucasfilm for Conspiring to Restrict Employee Recruiting

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

In September, the Department of Justice Antitrust Division announced a complaint and proposed consent decree arising out of an investigation into the use of “no solicitation” agreements among high technology companies to hold down employee salaries and defections.

As a result of its investigation, the Department of Justice filed a complaint on December 21 against Lucasfilm Ltd., a digital animation studio, for entering into agreements with rival Pixar to restrain employee recruitment for digital animators and other employees.

Lucasfilm and Pixar allegedly agreed not to cold call each other's employees; agreed to notify each other when making an offer to an employee of the other company; and agreed, when offering a position to the other company's employee, not to counteroffer with compensation above the initial offer.

At the same time the complaint was filed, the Justice Department Antitrust Division filed a proposed consent decree, which, if approved by the court, would resolve the lawsuit. The settlement would prohibit Lucasfilm from entering into agreements restraining
employee recruitment.

Pixar was not a named as a defendant in the complaint against Lucasfilm, because Pixar would be prohibited from entering into these types of agreements under the settlement announced in September (Trade Regulation Reporter ¶50,982).

The complaint and consent decree, announced in September, also name Adobe Systems Inc., Apple Inc., Google Inc., Intel Corp., and Intuit Inc.

"The agreement between Lucasfilm and Pixar restrained competition for digital animators without any procompetitive justification and distorted the competitive process," said Christine Varney, Assistant Attorney General in charge of the Department of Justice Antitrust Division. "The proposed settlement resolves the department's antitrust concerns."

The case is U.S. v. Lucasfilm Ltd. A December 21 news release on the settlement, a copy of the complaint, and a copy of the proposed final judgment appear on the Antitrust Division website.

Further details will appear in CCH Trade Regulation Reporter.