In re: High-Tech Employee Antitrust Litigation

Filing 93

DECLARATION of Dean M. Harvey in Opposition to #79 MOTION to Dismiss Consolidated Amended Complaint filed byMichael Devine, Mark Fichtner, Siddharth Hariharan, Brandon Marshall, Daniel Stover. (Attachments: #1 Exhibit A, #2 Exhibit B, #3 Exhibit C, #4 Exhibit D, #5 Exhibit E, #6 Exhibit F)(Related document(s) #79 ) (Harvey, Dean) (Filed on 11/4/2011)

Exhibit F

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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA
Plaintiff,
v.

Case: 1:10:-cv-02220
Assigned To: Walton, Reggie B.
Assign. Date: 12/21/2010
Description: Antitrust

LUCASFILM LTD.
Defendant.

UNITED STATES’ MOTION AND SUPPORTING MEMORANDUM TO ENTER FINAL
JUDGMENT

Pursuant to Section 2(b) of the Antitrust Procedures and Penalties Act, 15 U.S.C. § 16(b)(h) (“APPA” or “Tunney Act”), the United States moves for entry of the proposed Final
Judgment filed in this civil antitrust case. The proposed Final Judgment (attached as Exhibit A)
may be entered at this time without further hearing if the Court determines that entry is in the
public interest.1 The Defendant has stipulated to entry of the proposed Final Judgment without
further notice to any party or other proceedings. No party or member of the public has requested
a hearing. The Competitive Impact Statement (“CIS”), filed by the United States on December
21, 2010, explains why entry of the proposed Final Judgment is in the public interest. The
United States is filing simultaneously with this motion a Certificate of Compliance (attached as

The proposed Final Judgment attached to this Motion is the same as the one originally filed on
December 21, 2010.

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Exhibit B) setting forth the steps taken by the parties to comply with all applicable provisions of
the APPA and certifying that the statutory waiting periods have expired.
I.

BACKGROUND
On December 21, 2010, the United States filed the Complaint in this matter, alleging that

the Defendant entered into an agreement with Pixar, pursuant to which each agreed to restrict
certain employee recruiting practices. This agreement was per se unlawful under Section 1 of
the Sherman Act, 15 U.S.C. § 1.
At the same time the Complaint was filed, the United States also filed a proposed Final
Judgment, which is designed to eliminate the anticompetitive effects of the agreement, and a
CIS. The proposed Final Judgment is designed to preserve competition in the market for digital
animators and other employees by mandating certain conduct remedies. First, the proposed Final
Judgment prevents the Defendant from entering into similar agreements in the future. Second,
the proposed Final Judgment supplements this restraint on the Defendant with obligations to
educate executives about the proposed Final Judgment, as well as annually report the company’s
compliance with the proposed Final Judgment to the United States.
Entry of the proposed Final Judgment would terminate this action, except that the Court
would retain jurisdiction to construe, modify, or enforce the provisions of the proposed Final
Judgment and to punish violations thereof.
II.

COMPLIANCE WITH THE APPA
The APPA requires a sixty-day period for the submission of public comments on a

proposed Final Judgment. See 15 U.S.C. § 16(b). In compliance with the APPA, the United
States filed a CIS in this Court on December 21, 2010; published the proposed Final Judgment
and CIS in the Federal Register on December 28, 2010, see 75 Fed. Reg. 81,651 (2010); and

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caused to be published in The Washington Post a summary of the terms of the proposed Final
Judgment for seven days from December 25, 2010 through December 31, 2010. The 60-day
period for public comments ended on March 1, 2011, and three comments were received. The
United States filed its Response to Public Comments and the comments themselves with this
Court on April 15, 2011, and published the Response and the public comments in the Federal
Register on April 28, 2011. See 76 Fed. Reg. 23,839 (2011). The Certificate of Compliance filed
with this Motion as Exhibit B recites that all the requirements of the APPA have now been
satisfied. It is therefore appropriate for the Court to make the public interest determination
required by 15 U.S.C. § 16(e) and to enter the Final Judgment.
III.

STANDARD OF JUDICIAL REVIEW
Before entering the proposed Final Judgment, the Court is to determine whether the

Judgment “is in the public interest.” See 15 U.S.C. § 16(e). In making that determination, the
Court shall consider:
A)

the competitive impact of such judgment, including termination of alleged

violations, provisions for enforcement and modification, duration of relief sought,
anticipated effects of alternative remedies actually considered, whether its terms are
ambiguous, and any other competitive considerations bearing upon the adequacy of such
judgment that the court deems necessary to a determination of whether the consent
judgment is in the public interest; and
B)

the impact of entry of such judgment upon competition in the relevant

market or markets, upon the public generally and individuals alleging specific
injury from the violations set forth in the complaint including consideration of the
public benefit, if any, to be derived from a determination of the issues at trial.

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15 U.S.C. § 16(e).
In its CIS filed on December 21, 2010, the United States set forth the public interest
standard under the APPA and now incorporates those statements herein by reference. The
public, including affected competitors and customers, have had the opportunity to comment on
the proposed Final Judgment as required by law. As explained in the CIS, the proposed Final
Judgment is within the range of settlements consistent with the public interest and the United
States therefore requests that this Court enter the proposed Final Judgment.
IV.

CONCLUSION
For the reasons set forth in this Motion and the CIS, the Court should find that the

proposed Final Judgment is in the public interest and should enter the proposed Final Judgment
without further hearings. The United States respectfully requests that the proposed Final
Judgment attached hereto be entered as soon as possible.

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Dated: May 9, 2011
Respectfully submitted,

_____________________________________/s/
Adam T. Severt
Ryan S. Struve (D.C. Bar #495406)
Jessica N. Butler-Arkow (D.C. Bar #430022)
H. Joseph Pinto III
Anthony D. Scicchitano
Trial Attorneys
U.S. Department of Justice
Antitrust Division
Networks and Technology Section
450 Fifth Street, NW
Suite 7100
Washington, DC 20530
Telephone: [phone]
Facsimile: [phone]
Email: [e-mail]

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CERTIFICATE OF SERVICE
I, Adam Severt, hereby certify that on May 9, 2011, I caused a copy of the United States’
Motion and Supporting Memorandum to Enter the Final Judgment to be served on Defendant
Lucasfilm by mailing the document via email to the duly authorized legal representatives of the
defendant, as follows:

FOR DEFENDANT LUCASFILM, LTD.
Claudia R. Higgins, Esq.
Kaye Scholer LLP
901 Fifteenth Street, NW
Washington, D.C. 20005

___________________________________/s/
Adam T. Severt
Trial Attorney
Networks & Technology Section
U.S. Department of Justice
Antitrust Division
450 Fifth Street, NW
Suite 7100
Washington, DC 20530
Telephone: [phone]
Fax: [phone]
Email: [e-mail]

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EXHIBIT A

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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA
Plaintiff,
v.

LUCASFILM LTD.
Defendant.

[PROPOSED] FINAL JUDGMENT
WHEREAS, the United States of America filed its Complaint on December 21, 2010,
alleging that the Defendant participated in an agreement in violation of Section One of the
Sherman Act, and the United States and the Defendant, by their attorneys, have consented to the
entry of this Final Judgment without trial or adjudication of any issue of fact or law;
AND WHEREAS this Final Judgment does not constitute any admission by the
Defendant that the law has been violated or of any issue of fact or law, other than that the
jurisdictional facts as alleged in the Complaint are true;
AND WHEREAS, the Defendant agrees to be bound by the provisions of this Final
Judgment pending its approval by this Court;
NOW THEREFORE, before any testimony is taken, without trial or adjudication of any
issue of fact or law, and upon consent of the Defendant, it is ORDERED, ADJUDGED, AND
DECREED.

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I. JURISDICTION
This Court has jurisdiction over the subject matter and the parties to this action. The
Complaint states a claim upon which relief may be granted against the Defendant under Section
One of the Sherman Act, as amended, 15 U.S.C. § 1.
II. DEFINITIONS
As used in this Final Judgment:
A.

“Lucasfilm” means Lucasfilm Ltd., its (i) successors and assigns, (ii) controlled

subsidiaries, divisions, groups, affiliates, partnerships, and joint ventures, and (iii) directors,
officers, managers, agents acting within the scope of their agency, and employees.
B.

“Agreement” means any contract, arrangement, or understanding, formal or

informal, oral or written, between two or more persons.
C.

“No direct solicitation provision” means any agreement, or part of an agreement,

among two or more persons that restrains any person from cold calling, soliciting, recruiting, or
otherwise competing for employees of another person.
D.

“Person” means any natural person, corporation, company, partnership, joint

venture, firm, association, proprietorship, agency, board, authority, commission, office, or other
business or legal entity, whether private or governmental.
E.

“Senior manager” means any company officer or employee above the level of

vice president.

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III. APPLICABILITY
This Final Judgment applies to Lucasfilm, as defined in Section II, and to all other
persons in active concert or participation with Lucasfilm who receive actual notice of this Final
Judgment by personal service or otherwise.
IV. PROHIBITED CONDUCT
The Defendant is enjoined from attempting to enter into, entering into, maintaining or
enforcing any agreement with any other person to in any way refrain from, requesting that any
person in any way refrain from, or pressuring any person in any way to refrain from soliciting,
cold calling, recruiting, or otherwise competing for employees of the other person.
V. CONDUCT NOT PROHIBITED
A.

Nothing in Section IV shall prohibit the Defendant and any other person from

attempting to enter into, entering into, maintaining or enforcing a no direct solicitation provision,
provided the no direct solicitation provision is:
1.

contained within existing and future employment or severance agreements
with the Defendant’s employees;

2.

reasonably necessary for mergers or acquisitions, consummated or
unconsummated, investments, or divestitures, including due diligence
related thereto;

3.

reasonably necessary for contracts with consultants or recipients of
consulting services, auditors, outsourcing vendors, recruiting agencies or
providers of temporary employees or contract workers;

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4.

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reasonably necessary for the settlement or compromise of legal disputes;
or

5.

reasonably necessary for (i) contracts with resellers or OEMs; (ii)
contracts with providers or recipients of services other than those
enumerated in paragraphs V.A. 1 - 4 above; or (iii) the function of a
legitimate collaboration agreement, such as joint development, technology
integration, joint ventures, joint projects (including teaming agreements),
and the shared use of facilities.

B.

All no direct solicitation provisions that relate to written agreements described in

Section V.A.5.i, ii, or iii, that the Defendant enters into, renews, or affirmatively extends after
the date of entry of this Final Judgment shall:
1.

identify, with specificity, the agreement to which it is ancillary;

2.

be narrowly tailored to affect only employees who are anticipated to be
directly involved in the agreement;

3.

identify with reasonable specificity the employees who are subject to the
agreement;

4.

contain a specific termination date or event; and

5.

be signed by all parties to the agreement, including any modifications to
the agreement.

C.

For all no direct solicitation provisions that relate to unwritten agreements

described in Section V.A.5.i, ii, or iii, that the Defendant enters into, renews, or affirmatively

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extends after the date of entry of this Final Judgment, the Defendant shall maintain documents
sufficient to show:
1.

the specific agreement to which the no direct solicitation provision is
ancillary;

2.

the employees, identified with reasonable specificity, who are subject to
the no direct solicitation provision; and

3.
D.

the provision’s specific termination date or event.

The Defendant shall not be required to modify or conform, but shall not enforce,

any no direct solicitation provision to the extent it violates this Final Judgment if the no direct
solicitation provision appears in the Defendant’s consulting or services agreements in effect as of
the date of this Final Judgment (or in effect as of the time the Defendant acquires a company that
is a party to such an agreement).
E.

Nothing in Section IV shall prohibit the Defendant from unilaterally deciding to

adopt a policy not to consider applications from employees of another person, or to solicit, cold
call, recruit or hire employees of another person, provided that the Defendant is prohibited from
requesting that any other person adopt, enforce, or maintain such a policy, and is prohibited from
pressuring any other person to adopt, enforce, or maintain such a policy.
VI. REQUIRED CONDUCT
A.

The Defendant shall:
1.

furnish a copy of this Final Judgment and related Competitive Impact
Statement within sixty days of entry of the Final Judgment to its officers,

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directors, human resources managers, and senior managers who supervise
employee recruiting, solicitation, or hiring efforts;
2.

furnish a copy of this Final Judgment and related Competitive Impact
Statement to any person who succeeds to a position described in Section
VI.A.1 within thirty days of that succession;

3.

annually brief each person designated in Sections VI.A.1 and VI.A.2 on
the meaning and requirements of this Final Judgment and the antitrust
laws;

4.

obtain from each person designated in Sections VI.A.1 and VI.A.2, within
60 days of that person’s receipt of the Final Judgment, a certification that
he or she (i) has read and, to the best of his or her ability, understands and
agrees to abide by the terms of this Final Judgment; (ii) is not aware of
any violation of the Final Judgment that has not been reported to the
Defendant; and (iii) understands that any person’s failure to comply with
this Final Judgment may result in an enforcement action for civil or
criminal contempt of court against the Defendant and/or any person who
violates this Final Judgment;

5.

provide employees reasonably accessible notice of the existence of all
agreements covered by Section V.A.5 and entered into by the company;
and

6.

maintain (i) a copy of all agreements covered by Section V.A.5; and (ii) a
record of certifications received pursuant to this Section.

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B.

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For five (5) years after the entry of this Final Judgment, on or before its

anniversary date, the Defendant shall file with the United States an annual statement identifying
and providing copies of any agreement and any modifications thereto described in Section
V.A.5, as well as describing any violation or potential violation of this Final Judgment known to
any officer, director, human resources manager, or senior manager who supervises employee
recruiting, solicitation, or hiring efforts. Descriptions of violations or potential violations of this
Final Judgment shall include, to the extent practicable, a description of any communications
constituting the violation or potential violation, including the date and place of the
communication, the persons involved, and the subject matter of the communication.
C.

If any officer, director, human resources manager, or senior manager who

supervises employee recruiting, solicitation, or hiring eforts of the Defendant learns of any
violation or potential violation of any of the terms and conditions contained in this Final
Judgment, the Defendant shall promptly take appropriate action to terminate or modify the
activity so as to comply with this Final Judgment and maintain all documents related to any
violation or potential violation of this Final Judgment.
VII. COMPLIANCE INSPECTION
A.

For the purposes of determining or securing compliance with this Final Judgment,

or of determining whether the Final Judgment should be modified or vacated, from time to time
authorized representatives of the United States Department of Justice, including consultants and
other persons retained by the United States, shall, upon the written request of an authorized
representative of the Assistant Attorney General in charge of the Antitrust Division, and on
reasonable notice to the Defendant, subject to any legally recognized privilege, be permitted:

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1.

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access during the Defendant’s regular office hours to inspect and copy, or
at the option of the United States, to require the Defendant to provide
electronic or hard copies of, all books, ledgers, accounts, records, data,
and documents in the possession, custody, or control of the Defendant,
relating to any matters contained in this Final Judgment; and

2.

to interview, either informally or on the record, the Defendant’s officers,
employees, or agents, who may have their counsel, including any
individual counsel, present, regarding such matters. The interviews shall
be subject to the reasonable convenience of the interviewee and without
restraint or interference by the Defendant.

B.

Upon the written request of an authorized representative of the Assistant Attorney

General in charge of the Antitrust Division, the Defendant shall submit written reports or
responses to written interrogatories, under oath if requested, relating to any of the matters
contained in this Final Judgment as may be requested.
C.

No information or documents obtained by the means provided in this section shall

be divulged by the United States to any person other than an authorized representative of the
executive branch of the United States, except in the course of legal proceedings to which the
United States is a party (including grand jury proceedings), or for the purpose of securing
compliance with this Final Judgment, or as otherwise required by law.
D.

If at the time information or documents are furnished by the Defendant to the

United States, the Defendant represents and identifies in writing the material in any such
information or documents to which a claim of protection may be asserted under Rule 26(c)(1)(G)

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of the Federal Rules of Civil Procedure, and the Defendant marks each pertinent page of such
material, “Subject to claim of protection under Rule 26(c)(1)(G) of the Federal Rules of Civil
Procedure,” then the United States shall give the Defendant ten (10) calendar days notice prior to
divulging such material in any legal proceeding (other than a grand jury proceeding).
VIII. RETENTION OF JURISDICTION
This Court retains jurisdiction to enable any party to this Final Judgment to apply to this
Court at any time for further orders and directions as may be necessary or appropriate to carry
out or construe this Final Judgment, to modify any of its provisions, to enforce compliance, and
to punish violations of its provisions.
IX. EXPIRATION OF FINAL JUDGMENT
Unless this court grants an extension, this Final Judgment shall expire five (5) years from
the date of its approval by the Court.
X. NOTICE
For purposes of this Final Judgment, any notice or other communication shall be given to
the persons at the addresses set forth below (or such other addresses as they may specify in
writing to Lucasfilm):
Chief
Networks & Technology Enforcement Section
U.S. Department of Justice
Antitrust Division
450 Fifth Street, NW, Suite 7100
Washington, DC 20530
XI. PUBLIC INTEREST DETERMINATION
Entry of this Final Judgment is in the public interest. The parties have complied with the
Procedures of the Antitrust Procedures and Penalties Act, 15 U.S.C. § 16, including making

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copies available to the public of this Final Judgment, the Competitive Impact Statement, and any
comments thereon and the United States’ responses to comments. Based upon the record before
the Court, which includes the Competitive Impact Statement and any comments and response to
comments filed with the Court, entry of this final judgment is in the public interest.

Date:__________________
Court approval subject to procedures
of Antitrust Procedures and Penalties
Act, 15 U.S.C. § 16

___________________________
United States District Judge

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EXHIBIT B

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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA
Plaintiff,
Case: 1:10:-cv-02220
Assigned To: Walton, Reggie B.
Assign. Date: 12/21/2010
Description: Antitrust

v.

LUCASFILM LTD.
Defendant.

CERTIFICATE OF COMPLIANCE WITH PROVISIONS OF THE ANTITRUST
PROCEDURES AND PENALTIES ACT
Plaintiff United States of America, by the undersigned attorney, hereby certifies that, in
compliance with the Antitrust Procedures and Penalties Act, 15 U.S.C. § 16(b)-(h) (“APPA” or
“Tunney Act”), the following procedures have been followed in preparation for the entry of Final
Judgment in the above-captioned matter:
1.

The United States and Defendant stipulated to the entry of the proposed Final

Judgment on December 21, 2010 and December 16, 2010, respectively, and this stipulation was
filed with the Court on December 21, 2010.
2.

The proposed Final Judgment was filed with the Court on December 21, 2010.

3.

The Competitive Impact Statement was filed with the Court on December 21,

4.

The proposed Final Judgment and Competitive Impact Statement were published

2010.

in the Federal Register on December 28, 2010, see 75 Fed. Reg. 81,651 (2010).

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5.

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A summary of the terms of the proposed Final Judgment was published in the

Washington Post, a newspaper of general circulation in the District of Columbia, for seven
consecutive days beginning on December 25, 2010, and ending on December 31, 2010.
6.

Copies of the proposed Final Judgment and Competitive Impact Statement were

furnished to all persons requesting them and made available on the Antitrust Division’s Internet
site.
7.

As required by 15 U.S.C. § 16(g), Defendant filed with the Court a description of

written or oral communications by or on behalf of the Defendant, or any other person, with any
officer or employee of the United States concerning the proposed Final Judgment.
8.

The sixty-day comment period prescribed by 15 U.S.C. § 16(b) and (d) for the

receipt and consideration of written comments, during which the proposed Final Judgment could
not be entered, ended on March 1, 2011.
9.

The United States received three comments on the proposed Final Judgment. The

United States filed its Response to Public Comments and the comments themselves with this
Court on April 15, 2011. The United States published the Response and the comments in the
Federal Register on April 28, 2011, see 76 Fed. Reg. 23,839 (2011).
10.

The parties have now satisfied all the requirements of the Antitrust Procedures

and Penalties Act, 15 U.S.C. § 16(b)-(h), as a condition for entering the proposed Final
Judgment, and it is now appropriate for the Court to make the necessary public interest
determinations required by 15 U.S.C. § 16(e) and to enter the proposed Final Judgment.

Dated: May 9, 2011

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Respectfully submitted,

_______________________________________/s/
Adam T. Severt
U.S. Department of Justice
Antitrust Division
Networks and Technology Section
450 Fifth Street, NW
Suite 7100
Washington, DC 20530
Telephone: [phone]
Facsimile: [phone]
Email: [e-mail]

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