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HP Gets ‘No Poach’ Antitrust Claims Stripped From Age Bias Case

Feb. 3, 2020, 11:36 PM

Hewlett-Packard Co. doesn’t have to face proposed class action claims that a “no poach” agreement prevented fired employees from finding new work with a 3D printing rival after age-related layoffs, a San Diego federal judge ruled Monday.

The lawsuit accuses HP of discriminating against older workers during a round of layoffs starting in late 2015. It landed in the U.S. District Court for the Southern District of California after being filed in state court by one of the laid off ex-HP employees, Bryant Fonseca.

Around the same time, in response to successful raids on HP executives by nonparty 3D Systems Inc., the companies reached an informal “cease-fire” to stop soliciting each other’s workers, the suit says. The deal was allegedly struck by HP president Stephen Nigro and 3D Systems CEO Vyomesh Joshi, a former HP executive.

HP fired at least one person for interviewing with 3D Systems, according to the suit. It allegedly enforced the agreement internally by cutting off severance payments and job search help to laid-off employees who applied to work there.

The companies also stopped recruiting each other’s workers through headhunters and shared pay scales “to avoid entering a bidding war,” the suit says.

Judge Gonzalo P. Curiel tossed the no-poach allegations from the case in a ruling that didn’t tackle the age bias claims.

The suit doesn’t “allege any specific communications, meetings, or interactions” or state “where, when, or how the alleged agreement was reached,” the judge said.

“Although plaintiff references the relationship between Joshi and Nigro, he fails to point to any specific connection or communication between the two with respect to a no-poach agreement,” Curiel wrote. “These allegations fall short.”

He rejected Fonseca’s reliance on two earlier no-poach suits that had survived a dismissal bid.

Those plaintiffs “pled their allegations with great factual support and detail,” the judge said, including “who drafted the agreement, the specific involvement of the top executives in the drafting of said agreement, and a multitude of email communications.”

But Fonseca’s suit was doomed by its failure to show any “joint concerted activity” or suspicious circumstances that raise an inference of “covert joint activity,” Curiel found.

“Plaintiff’s allegations are either insufficient or otherwise can be independently explained by rational business decisions,” he wrote.

HP is represented by Wilson Turner Kosmo LLP. Fonseca is represented by Hogue & Belong.

The case is Fonseca v. Hewlett-Packard Co., S.D. Cal., No. 19-cv-1748, 2/3/20.

To contact the reporter on this story: Mike Leonard in Washington at mleonard@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Nicholas Datlowe at ndatlowe@bloomberglaw.com

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