[Federal Register Volume 75, Number 248 (Tuesday, December 28, 2010)]
[Notices]
[Pages 81651-81659]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-32601]
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DEPARTMENT OF JUSTICE
Antitrust Division
United States v. Lucasfilm Ltd.; Proposed Final Judgment and
Competitive Impact Statement
Notice is hereby given pursuant to the Antitrust Procedures and
Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment,
Stipulation and Competitive Impact Statement have been filed with the
United States District Court for the District of Columbia in United
States of America v. Lucasfilm Ltd., Civil Case No. 1:10-cv-02220. On
December 21, 2010, the United States filed a Complaint alleging that
Lucasfilm Ltd. and Pixar entered into an agreement, in violation of
Section 1 of the Sherman Act, 15 U.S.C. 1, in which they agreed not to
actively solicit each other's highly skilled digital animators and
other employees, to notify each other when making an offer to an
employee of the other company, and that the company making an offer to
the other company's employee would not counteroffer above its initial
offer. The proposed Final Judgment, filed the at same time as the
Complaint, requires Lucasfilm to refrain from entering into similar
agreements in the future.
Copies of the Complaint, proposed Final Judgment and Competitive
Impact Statement are available for inspection at the Department of
Justice, Antitrust Division, Antitrust Documents Group, 450 Fifth
Street, NW., Suite 1010, Washington, DC 20530 (telephone: 202-514-
2481), on the Department of Justice's Web site at http://www.justice.gov/atr, and at the Office of the Clerk of the United
States District Court for the District of Columbia. Copies of these
materials may be obtained from the Antitrust Division upon request and
payment of the copying fee set by Department of Justice regulations.
Public comment is invited within 60 days of the date of this
notice. Such comments, and responses thereto, will be published in the
Federal Register and filed with the Court. Comments should be directed
to James J. Tierney, Chief, Networks and Technology Section, Antitrust
Division, U.S. Department of Justice, 450 Fifth Street, NW., Suite
7100, Washington, DC 20530 (telephone: 202-307-6200).
Patricia A. Brink,
Director of Civil Enforcement.
United States District Court for the District of Columbia
United States of America, U.S. Department of Justice, Antitrust
Division, 450 Fifth Street, NW., Suite 7100, Washington, DC 20530,
Plaintiff, v. Lucasfilm Ltd., 1110 Gorgas Avenue, San Francisco, CA
94129, Defendant.
Case: 1:10-cv-02220.
Assigned To: Walton, Reggie B.
Assign. Date: 12/21/2010.
Description: Antitrust.
Complaint
The United States of America, acting under the direction of the
Attorney General of the United States, brings this civil antitrust
action to obtain equitable relief against Defendant Lucasfilm Ltd.
(``Lucasfilm''), alleging as follows:
Nature of the Action
This action challenges under Section 1 of the Sherman Act an
agreement between Lucasfilm and Pixar that restrained competition
between them for highly skilled digital animators.
Lucasfilm and Pixar compete for highly skilled digital animators
and solicit employees at other digital animation studios to fill
employment openings. Lucasfilm and Pixar entered into an agreement not
to cold call, not to make counteroffers under certain circumstances,
and to provide notification when making employment offers to each
other's employees. This agreement reduced Lucasfilm's and Pixar's
ability to compete for employees and disrupted the normal price-setting
mechanisms that apply in the labor setting. This agreement is facially
anticompetitive. It eliminated significant forms of competition to
attract digital animators and, overall, substantially diminished
competition to the detriment of the affected employees who likely were
deprived of competitively important information and access to better
job opportunities.
Lucasfilm and Pixar's agreement is a restraint of trade that is per
se unlawful under Section 1 of the Sherman Act, 15 U.S.C. 1. The United
States seeks an order prohibiting such an agreement.
Jurisdiction and Venue
Lucasfilm hires specialized digital animators throughout the United
States, and sells completed digital animation
[[Page 81652]]
films throughout the United States. Such activities, including the
recruitment and hiring activities at issue in this Complaint, are in
the flow of and substantially affect interstate commerce. The Court has
subject matter jurisdiction under Section 4 of the Sherman Act, 15
U.S.C. 4, and under 28 U.S.C. 1331 and 1337 to prevent and restrain
Lucasfilm from violating Section 1 of the Sherman Act, 15 U.S.C. 1.
Venue is proper in this judicial district under Section 12 of the
Clayton Act, 15 U.S.C. 22, and under 28 U.S.C. 1391(b)(2), (c).
Lucasfilm transacts or has transacted substantial business here.
Defendant
6. Lucasfilm is a California corporation with its principal place
of business in San Francisco, California.
Trade and Commerce
12. Digital animation labor is characterized by expertise and
specialization. Lucasfilm and Pixar compete for digital animators on
the basis of salaries, benefits, and career opportunities. In recent
years, talented digital animation employees have been in high demand.
13. Although Lucasfilm and Pixar employ a variety of recruiting
techniques, cold calling another studio's employees is an effective
method of competing for digital animators. Cold calling involves
communicating directly in any manner (including orally, in writing,
telephonically, or electronically) with another firm's employee who has
not otherwise applied for a job opening. Lucasfilm and Pixar frequently
recruit employees by cold calling because other studios' employees have
the specialized skills necessary for the vacant position and may be
unresponsive to other methods of recruiting.
14. Lucasfilm and Pixar also aggressively bid against other digital
animation studios for the services of talented employees and
prospective employees. When the labor market is functioning without
illegal competitive restraints, savvy employees can use these studios'
aggressive tactics to extract multiple rounds of bidding, thus
increasing their eventual salaries.
15. In a well-functioning labor market, employers compete to
attract the most valuable talent for their needs. Lucasfilm's and
Pixar's behavior both reduced their ability to compete for employees
and disrupted the normal price-setting mechanisms that apply in the
labor setting. Lucasfilm's and Pixar's agreement not to cold call, not
to make counter offers under certain circumstances, and to provide
notification when making employment offers is facially anticompetitive.
It eliminated significant forms of competition to attract digital
animators and, overall, substantially diminished competition to the
detriment of the affected employees who likely were deprived of
competitively important information and access to better job
opportunities.
The Unlawful Agreement
16. Beginning no later than January 2005, Lucasfilm and Pixar
agreed to a protocol regarding the recruitment of each other's
employees. The agreement included three requirements: (1) That the
firms not cold call each other's employees; (2) that the firms notify
each other when making an offer to an employee of the other firm; and
(3) that the firm making an offer to the other firm's employee not
counteroffer above its initial offer.
17. This agreement was not ancillary to any legitimate
collaboration between Lucasfilm and Pixar. Senior executives at
Lucasfilm and Pixar reached this express agreement through direct and
explicit communications. The executives actively managed and enforced
the agreement through direct communications.
18. The agreement between Lucasfilm and Pixar covered all digital
animators and other employees and was not limited by geography, job
function, product group, or time period. Moreover, employees did not
agree to this restriction.
19. In furtherance of this agreement, Pixar drafted the terms of
the agreement with Lucasfilm and communicated those written terms to
Lucasfilm. Both firms internally communicated the agreement to
management and select employees with hiring or recruiting
responsibilities.
20. Lucasfilm and Pixar, through their senior executives, policed
potential breaches of the agreement. For example, twice in 2007, Pixar
complained to Lucasfilm about recruiting efforts Lucasfilm had made.
Complaints about breaches of the agreement led the parties to modify
their conduct going forward to conform to the agreement.
Violation Alleged
(Violation of Section 1 of the Sherman Act)
21. The United States hereby incorporates paragraphs 1 through 20.
22. Lucasfilm is a direct competitor to Pixar for digital animators
and other employees covered by the agreement at issue here. Lucasfilm's
behavior both reduced its ability to compete for employees and
disrupted the normal price-setting mechanisms that apply in the labor
setting. This agreement is facially anticompetitive because it
eliminated significant forms of competition to attract digital
animators and, overall, substantially diminished competition to the
detriment of the affected employees who likely were deprived of
competitively important information and access to better job
opportunities.
23. Lucasfilm's agreement constitutes an unreasonable restraint of
trade that is per se unlawful under Section 1 of the Sherman Act, 15
U.S.C. 1.
Requested Relief
The United States requests that the Court:
(A) Adjudge and decree that Lucasfilm's agreement not to compete
constitutes an illegal restraint of interstate trade and commerce in
violation of Section 1 of the Sherman Act;
(B) Enjoin and restrain Lucasfilm from enforcing or adhering to
existing agreements that unreasonably restrict competition for
employees;
(C) Permanently enjoin and restrain Lucasfilm from establishing any
similar agreement unreasonably restricting competition for employees
except as prescribed by the Court;
(D) Award the United States such other relief as the Court may deem
just and proper to redress and prevent recurrence of the alleged
violations and to dissipate the anticompetitive effects of the illegal
agreements entered into by Lucasfilm; and
(E) Award the United States the costs of this action.
Dated this 21st day of December 2010.
Respectfully submitted,
FOR PLAINTIFF UNITED STATES:
Christine A. Varney,
Assistant Attorney General, DC Bar #411654.
Molly S. Boast,
Deputy Assistant Attorney General.
Katherine S. Forrest,
Deputy Assistant Attorney General.
Patricia A. Brink,
Director of Civil Enforcement,
James J. Tierney, Chief,
Networks and Technology Section, DC Bar #434610.
Scott A. Scheele, Assistant Chief,
Networks and Technology Section, DC Bar #429061.
Adam T. Severt,
Ryan S. Struve (DC Bar #495406),
Jessica N. Butler-Arkow (DC 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.
[[Page 81653]]
Telephone: (202) 307-6200.
Facsimile: (202) 616-8544.
[email protected].
Certificate of Service
I, Adam Severt, hereby certify that on December 21, 2010, I caused
a copy of the Complaint to be served on Defendant Lucasfilm by mailing
the document via e-mail 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, DC 20005.
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: (202) 307-6200.
Fax: (202) 616-8544.
E-mail: [email protected].
United States District Court for the District of Columbia
United States of America, U.S. Department of Justice, Antitrust
Division, 450 Fifth Street, NW., Suite 7100, Washington, DC 20530,
Plaintiff, v. Lucasfilm Ltd., 1110 Gorgas Avenue, San Francisco, CA
94129, Defendant.
Case: 1:10-cv-02220.
Assigned To: Walton, Reggie B.
Assign. Date: 12/21/2010.
Description: Antitrust.
Competitive Impact Statement
Plaintiff United States of America (``United States''), pursuant to
Section 2(b) of the Antitrust Procedures and Penalties Act (``APPA'' or
``Tunney Act''), 15 U.S.C. 16(b)-(h), files this Competitive Impact
Statement relating to the proposed Final Judgment submitted for entry
in this civil antitrust proceeding.
I. Nature and Purpose of the Proceeding
The United States brought this lawsuit against Defendant Lucasfilm
Ltd. (``Lucasfilm'') on December 21, 2010, to remedy a violation of
Section 1 of the Sherman Act, 15 U.S.C. 1. The Complaint alleges that
Lucasfilm entered an agreement with Pixar, pursuant to which each
agreed to restrict certain employee recruiting practices. The effect of
this agreement was to reduce competition for highly-skilled digital
animators and other employees, diminish potential employment
opportunities for those same employees, and interfere in the proper
functioning of the price-setting mechanism that would otherwise have
prevailed. The agreement is a naked restraint of trade and violates
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 would remedy the violation by
having the Court declare the agreement illegal, enjoin Lucasfilm from
enforcing any such agreements currently in effect, and prohibit
Lucasfilm from entering similar agreements in the future. The United
States has sought a similar proposed Final Judgment against Pixar in a
separate civil action, United States v. Adobe Systems, Inc., No. 1:10-
cv-01629, 75 FR 60820, 60828-30 (D.D.C. filed Sept. 24, 2010). The
United States and Lucasfilm have stipulated that the proposed Final
Judgment may be entered after compliance with the APPA, unless the
United States withdraws its consent. Entry of the proposed Final
Judgment would terminate this action, except that this Court would
retain jurisdiction to construe, modify, and enforce the proposed Final
Judgment and to punish violations thereof.
II. Description of the Events Giving Rise to the Alleged Violation of
the Antitrust Laws
Lucasfilm and Pixar are rival digital animation studios. Beginning
no later than January 2005, Lucasfilm and Pixar agreed to a three-part
protocol that restricted recruiting of each other's employees. First,
Lucasfilm and Pixar agreed they would not cold call each other's
employees. Cold calling involves communicating directly in any manner
(including orally, in writing, telephonically, or electronically) with
another firm's employee who has not otherwise applied for a job
opening. Second, they agreed to notify each other when making an offer
to an employee of the other firm. Third, they agreed that, when
offering a position to the other company's employee, neither would
counteroffer above the initial offer.
The protocol covered all digital animators and other employees of
both firms and was not limited by geography, job function, product
group, or time period. Senior executives at the two firms agreed on the
protocol through direct and explicit communications. In furtherance of
this agreement, Pixar drafted the terms of the agreement with Lucasfilm
and communicated those written terms to Lucasfilm. Both firms
communicated the agreement to management and select employees with
hiring or recruiting responsibilities. Twice in 2007, Pixar complained
to Lucasfilm about recruiting efforts Lucasfilm had made. Complaints
about breaches of the agreement led the two firms to alter their
conduct going forward to conform to the agreement.
Lucasfilm's and Pixar's agreed-upon protocol disrupted the
competitive market forces for employee talent. It eliminated a
significant form of competition to attract digital animation employees
and other employees covered by the agreement. Overall, it substantially
diminished competition to the detriment of the affected employees who
likely were deprived of information and access to better job
opportunities.
The agreement was a naked restraint of trade that was per se
unlawful under Section 1 of the Sherman Act, 15 U.S.C. 1.
III. The Agreement Was a Naked Restraint and Not Ancillary To Achieving
Legitimate Business Purposes
Section 1 of the Sherman Act outlaws ``[e]very contract,
combination in the form of trust or otherwise, or conspiracy, in
restraint of trade or commerce among the several States.'' 15 U.S.C. 1.
The Sherman Act is designed to ensure ``free and unfettered competition
as the rule of trade. It rests on the premise that the unrestrained
interaction of competitive forces will yield the best allocation of our
economic resources, the lowest prices, the highest quality and the
greatest material progress * * *.'' National Collegiate Athletic Ass'n
v. Board of Regents of Univ. of Okla., 468 U.S. 85, 104 n.27 (1984)
(quoting Northern Pac. Ry. v. United States, 356 U.S. 1, 4-5 (1958)).
The law has long recognized that ``certain agreements or practices
which because of their pernicious effect on competition and lack of any
redeeming virtue are conclusively presumed to be unreasonable and
therefore illegal without elaborate inquiry as to the precise harm they
have caused or the business excuse for their use.'' Northern Pac. Ry.,
356 U.S. at 545; accord, Catalano, Inc. v. Target Sales, Inc., 446 U.S.
643, 646 n.9 (1980). Such naked restraints of competition among
horizontal competitors (i.e., agreements that have a pernicious effect
on competition with no redeeming virtue) are deemed per se unlawful.
The United States has previously challenged restraints on
employment as per se illegal. In September 2010, the United States
filed suit charging six high technology firms with a per se violation
of Section 1 for entering bilateral agreements to prohibit each firm
from cold calling the other firm's employees. United States v. Adobe
Systems, Inc., No. 1:10-cv-01629, Complaint, 75 FR 60822 (D.D.C. filed
Sept. 24, 2010); Competitive Impact
[[Page 81654]]
Statement, 75 FR 60823 (D.D.C. filed Sept. 24, 2010).
The restraint challenged here is broader than the no cold call
restraints challenged in United States v. Adobe Systems, Inc. The
prohibition on counteroffers by non-employing firms renders the
Lucasfilm-Pixar agreement, taken as a whole, more pernicious than an
agreement to refrain from cold-calling, and is per se unlawful. See
National Soc'y of Prof. Engineers v. United States, 435 U.S. 679, 695
(1978); Harkins Amusement Enterprises, Inc. v. General Cinema Corp.,
850 F.2d 477, 487 (9th Cir. 1988).
Prior to United States v. Adobe Systems, Inc., the United States
brought a per se challenge in 1996 to employment restraints contained
within guidelines designed to curb competition between residency
programs for senior medical students and residents of other programs.
Members of the Association of Family Practice Residency Directors had
agreed not to directly solicit residents from each other, conduct
recognized as ``per se unlawful'' under Section 1. United States v.
Association of Family Practice Residency Doctors, No. 96-575-CV-W-2,
Complaint at 6 (W.D.Mo. May 28, 1996); Competitive Impact Statement, 61
FR 28891, 28894 (W.D.Mo. May 28, 1996). The Court entered an agreed-
upon Final Judgment, enjoining the association from restraining
competition among residency programs for residents, including enjoining
all prohibitions on direct and indirect solicitation of residents from
other programs. 1996-2 Trade Cases ] 71,533, 28894 (W.D.Mo. Aug. 15,
1996).
In analogous circumstances, the Sixth Circuit has held that an
agreement among competitors not to solicit one another's customers was
a per se violation of the antitrust laws. U.S. v. Cooperative Theaters
of Ohio, Inc., 845 F.2d 1367 (6th Cir. 1988). In that case, two movie
theater booking agents agreed to refrain from actively soliciting each
other's customers. Despite the defendants' arguments that they
``remained free to accept unsolicited business from their competitors'
customers,'' id. (emphasis in original), the Sixth Circuit found their
``no-solicitation agreement'' was ``undeniably a type of customer
allocation scheme which courts have often condemned in the past as a
per se violation of the Sherman Act.'' Id. at 1373.
Antitrust analysis of downstream customer-related restraints
applies equally to upstream monopsony restraints on employment
opportunities. In 1991, the Antitrust Division brought an action
against conspirators who competed to procure billboard leases and who
had agreed to refrain from bidding on each other's former leases for a
year after the space was lost or abandoned by the other conspirator.
United States v. Brown, 936 F.2d 1042 (9th Cir. 1991) (affirming jury
verdict convicting defendants of conspiring to restrain trade in
violation of 15 U.S.C. 1). The agreement was limited to an input market
(the procurement of billboard leases) and did not extend to downstream
sales (in which the parties also competed). In affirming defendants'
convictions, the appellate court held that the agreement was per se
unlawful:
The agreement restricted each company's ability to compete for
the other's billboard sites. It clearly allocated markets between
the two billboard companies. A market allocation agreement between
two companies at the same market level is a classic per se antitrust
violation.
Id. at 1045.
Allocation agreements cannot be distinguished from one another
based solely on whether they involve input or output markets.
Anticompetitive agreements in both input and output markets create
allocative inefficiencies.\1\ Hence, naked restraints on cold calling
customers, suppliers, or employees are similarly per se unlawful.
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\1\ See Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co.,
Inc., 549 U.S. 312, 321 (2007) (``Predatory-pricing and predatory-
bidding are analytically similar. This similarity results from the
close theoretical connection between monopoly and monopsony.'')
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Still, an agreement that would normally be condemned as a per se
unlawful restraint on competition may nonetheless be lawful if it is
ancillary to a legitimate procompetitive venture and reasonably
necessary to achieve the procompetitive benefits of the collaboration.
Ancillary restraints therefore are not per se unlawful, but rather
evaluated under the rule of reason, which balances a restraint's
procompetitive benefits against its anticompetitive effects.\2\ To be
considered ``ancillary'' under established antitrust law, however, the
restraint must be a necessary or intrinsic part of the procompetitive
collaboration.\3\ Restraints that are broader than reasonably necessary
to achieve the efficiencies from a business collaboration are not
ancillary and are properly treated as per se unlawful.
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\2\ See generally Department of Justice, Antitrust Division, and
Federal Trade Commission, Antitrust Guidelines for Collaborations
Among Competitors Sec. 1.2 (2000) (``Collaboration Guidelines'').
See also Major League Baseball v. Salvino, 542 F.3d 290, 339 (2d
Cir. 2008) (Sotomayor, J., concurring) (``a per se or quick look
approach may apply * * * where a particular restraint is not
reasonably necessary to achieve any of the efficiency-enhancing
benefits of a joint venture and serves only as a naked restraint
against competition.''); Dagher v. Saudi Refining, Inc., 369 F.3d
1108, 1121 (9th Cir. 2004) (``reasonably necessary to further the
legitimate aims of the joint venture''); rev'd on other grounds sub
nom. Texaco v. Dagher, 547 U.S. 1, 8 (2006); Rothery Storage & Van
Co. v. Atlas Van Lines, Inc., 792 F.2d 210, 227 (DC Cir. 1986)
(``the restraints it imposes are reasonably necessary to the
business it is authorized to conduct''); In re Polygram Holdings.,
Inc., 2003 WL 21770765 (F.T.C. 2003) (parties must prove that the
restraint was ``reasonably necessary'' to permit them to achieve
particular alleged efficiency), aff'd, Polygram Holdings, Inc. v.
F.T.C., 416 F.3d 29 (DC Cir. 2005).
\3\ See Rothery Storage & Van Co., 792 F.2d at 227 (national
moving network in which the participants shared physical resources,
scheduling, training, and advertising resources, could forbid
contractors from free riding by using its equipment, uniforms, and
trucks for business they were conducting on their own); Salvino, 542
F.3d at 337 (Sotomayor, J., concurring) (Major League Baseball teams
created a formal joint venture to exclusively license, and share
profits for, team trademarks, resulting in ``decreased transaction
costs, lower enforcement and monitoring costs, and the ability to
one-stop shop. * * *'' Such benefits ``could not exist without the *
* * agreements.''); Addamax v. Open Software Found., 152 F.3d 48
(1st Cir. 1998) (computer manufacturers formed nonprofit joint
research and development venture to develop operating system;
agreement on price to be paid for security software that was used by
joint venture was ancillary to effort to develop a new system). See
also Collaboration Guidelines at Sec. 3.2 (``[I]f the participants
could achieve an equivalent or comparable efficiency-enhancing
integration through practical, significantly less restrictive means,
then * * * the agreement is not reasonably necessary.'').
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Although Lucasfilm and Pixar have at times engaged in legitimate
collaborative projects, the recruiting agreement into which they
entered was not, under established antitrust law, properly ancillary to
those collaborations. The agreement was not tied to any specific
collaboration. The agreement extended to all employees at the firms,
regardless of any employee's relationship to any collaboration. The
agreement was not limited by geography, job function, product group, or
time period. The agreement was not reasonably necessary for any
collaboration and hence, not a legitimate ancillary restraint.
Lucasfilm's agreement with Pixar is per se unlawful under Section 1
of the Sherman Act. The two firms' concerted behavior both reduced
their ability to compete for employees and disrupted the normal price-
setting mechanisms that apply in the labor setting. The agreement is
facially anticompetitive because it eliminated a significant form of
competition to attract digital animators and other employees. Overall,
it substantially diminished competition to the detriment of the
affected employees who likely were deprived of competitively important
information and access to better job opportunities.
[[Page 81655]]
IV. Explanation of the Proposed Final Judgment
The proposed Final Judgment sets forth (1) Conduct in which
Lucasfilm may not engage; (2) conduct in which Lucasfilm may engage
without violating the proposed Final Judgment; (3) certain actions
Lucasfilm is required to take to ensure compliance with the terms of
the proposed Final Judgment; and (4) oversight procedures the United
States may use to ensure compliance with the proposed Final Judgment.
Section VI of the proposed Final Judgment provides that these
provisions will expire five years after entry of the proposed Final
Judgment.
A. Prohibited Conduct
The proposed Final Judgment is substantially similar to that
proposed in United States v. Adobe Systems, Inc., No. 1:10-cv-01629,
Proposed Final Judgment, 75 FR 60828-30 (D.D.C. Sept. 24, 2010).
Section IV of the proposed Final Judgment preserves competition for
employees by prohibiting Lucasfilm, and all other persons in active
concert or participation with Lucasfilm with notice of the proposed
Final Judgment, from agreeing, or attempting to agree, with another
person to refrain from cold calling, soliciting, recruiting, or
otherwise competing for employees of the other person. It also
prohibits Lucasfilm from requesting or pressuring another person to
refrain from cold calling, soliciting, recruiting, or otherwise
competing for employees of the other person. These provisions prohibit
agreements not to make counteroffers and agreements to notify each
other when making an offer to each other's employee.
B. Conduct Not Prohibited
The Final Judgment does not prohibit all agreements related to
employee solicitation and recruitment. Section V makes clear that the
proposed Final Judgment does not prohibit ``no direct solicitation
provisions'' \4\ that are reasonably necessary for, and thus ancillary
to, legitimate procompetitive collaborations.\5\ Such restraints remain
subject to scrutiny under the rule of reason.
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\4\ Section II.C. of the proposed Final Judgment defines ``no
direct solicitation provision'' as ``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.''
\5\ The Complaint alleges a violation of the Sherman Antitrust
Act, 15 U.S.C. 1. The scope of the Final Judgment is limited to
violations of the Federal antitrust laws. It prohibits certain
conduct and specifies other conduct that the Judgment would not
prohibit. The Judgment does not address whether any conduct it does
not prohibit would be prohibited by other Federal or State laws,
including California Business & Professions Code Sec. 16600
(prohibiting firms from restraining employee movement).
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Section V.A.1 does not prohibit no direct solicitation provisions
contained in existing and future employment or severance agreements
with Lucasfilm's employees. Narrowly tailored no direct solicitation
provisions are often included in severance agreements and rarely
present competition concerns. Sections V.A.2-5 also make clear that the
proposed Final Judgment does not prohibit no direct solicitation
provisions reasonably necessary for:
1. Mergers or acquisitions (consummated or unconsummated),
investments, or divestitures, including due diligence related thereto;
2. Contracts with consultants or recipients of consulting services,
auditors, outsourcing vendors, recruiting agencies or providers of
temporary employees or contract workers;
3. The settlement or compromise of legal disputes; and
4. Contracts with resellers or OEMs; contracts with certain
providers or recipients of services; or 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.
Section V of the proposed Final Judgment contains additional
requirements applicable to no direct solicitation provisions contained
in these types of contracts and collaboration agreements. The proposed
Final Judgment recognizes that Lucasfilm may sometimes enter written or
unwritten contracts and collaboration agreements and sets forth
requirements that recognize the different nature of written and
unwritten contracts.
Thus, for written contracts, Section V.B of the proposed Final
Judgment requires Lucasfilm to: (1) Identify, with specificity, the
agreement to which the no direct solicitation provision is ancillary;
(2) narrowly tailor the no direct solicitation provision to affect only
employees who are anticipated to be directly involved in the
arrangement; (3) identify with reasonable specificity the employees who
are subject to the no direct solicitation provision; (4) include a
specific termination date or event; and (5) sign the agreement,
including any modifications to the agreement.
If the no direct solicitation provision relates to an oral
agreement, Section V.C of the proposed Final Judgment requires
Lucasfilm to maintain documents sufficient to show the terms of the no
direct solicitation provision, including: (1) The specific agreement to
which the no direct solicitation provision is ancillary; (2) an
identification, with reasonable specificity, of the employees who are
subject to the no direct solicitation provision; and (3) the no direct
solicitation provision's specific termination date or event.\6\
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\6\ For example, Lucasfilm might document these requirements
through electronic mail or in memoranda that it will retain.
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The purpose of Sections V.B. and V.C. is to ensure that no direct
solicitation provisions related to Lucasfilm's contracts with
resellers, OEMs, and providers of services, and collaborations with
other companies, are reasonably necessary to the contract or
collaboration. In addition, the requirements set forth in Sections V.B
and V.C of the proposed Final Judgment provide the United States with
the ability to monitor Lucasfilm's compliance with the proposed Final
Judgment.
Lucasfilm has a large number of routine consulting and services
agreements that contain no direct solicitation provisions that may not
comply with the terms of the proposed Final Judgment. To avoid the
unnecessary burden of identifying these existing contracts and re-
negotiating any no direct solicitation provisions, Section V.D of the
proposed Final Judgment provides that, subject to the conditions below,
Lucasfilm shall not be required to modify or conform existing no direct
solicitation provisions included in consulting or services agreements
to the extent such provisions violate this Final Judgment. The Final
Judgment further prohibits Lucasfilm from enforcing any such existing
no direct solicitation provision that would violate the proposed Final
Judgment.
Finally, Section V.E of the proposed Final Judgment provides that
Lucasfilm is not prohibited from unilaterally adopting or maintaining a
policy not to consider applications from employees of another person,
or not to solicit, cold call, recruit or hire employees of another
person, provided that Lucasfilm does not request or pressure another
person to adopt, enforce, or maintain such a policy.
C. Required Conduct
Section VI of the proposed Final Judgment sets forth various
mandatory procedures to ensure Lucasfilm's compliance with the proposed
Final Judgment, including providing officers, directors, human resource
managers, and senior managers who supervise employee recruiting with
copies of the
[[Page 81656]]
proposed Final Judgment and annual briefings about its terms. Section
VI.A.5 requires Lucasfilm to provide its employees with reasonably
accessible notice of the existence of all agreements covered by Section
V.A.5 and entered into by the company.
Under Section VI, Lucasfilm must file annually with the United
States a statement identifying any agreement covered by Section V.A.5.,
and describing any violation or potential violation of the Final
Judgment known to any officer, director, human resources manager, or
senior manager who supervises employee recruiting, solicitation, or
hiring efforts. If one of these persons learns of a violation or
potential violation of the Judgment, Lucasfilm must take steps to
terminate or modify the activity to comply with the Judgment and
maintain all documents related to the activity.
D. Compliance
To facilitate monitoring of Lucasfilm's compliance with the
proposed Final Judgment, Section VII grants the United States access,
upon reasonable notice, to Lucasfilm's records and documents relating
to matters contained in the proposed Final Judgment. Lucasfilm must
also make its employees available for interviews or depositions about
such matters. Moreover, upon request, Lucasfilm must answer
interrogatories and prepare written reports relating to matters
contained in the proposed Final Judgment.
V. Remedies Available to Potential Private Litigants
Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any
person who has been injured as a result of conduct prohibited by the
antitrust laws may bring suit in Federal court to recover three times
the damages the person has suffered, as well as costs and reasonable
attorneys' fees. Entry of the proposed Final Judgment will neither
impair nor assist the bringing of any private antitrust damage action.
Under the provisions of Section 5(a) of the Clayton Act, 15 U.S.C.
16(a), the proposed Final Judgment has no prima facie effect in any
subsequent private lawsuit that may be brought against Lucasfilm.
VI. Procedures Applicable for Approval or Modification of the Proposed
Final Judgment
The United States and Lucasfilm have stipulated that the proposed
Final Judgment may be entered by the Court after compliance with the
provisions of the APPA, provided that the United States has not
withdrawn its consent. The APPA conditions entry upon the Court's
determination that the proposed Final Judgment is in the public
interest.
The APPA provides a period of at least sixty (60) days preceding
the effective date of the proposed Final Judgment within which any
person may submit to the United States written comments regarding the
proposed Final Judgment. Any person who wishes to comment should do so
within sixty (60) days of the date of publication of this Competitive
Impact Statement in the Federal Register, or the last date of
publication in a newspaper of the summary of this Competitive Impact
Statement, whichever is later. All comments received during this period
will be considered by the United States, which remains free to withdraw
its consent to the proposed Final Judgment at any time prior to the
Court's entry of judgment. The comments and the response of the United
States will be filed with the Court and published in the Federal
Register.
Written comments should be submitted to: James J. Tierney, Chief,
Networks & Technology Enforcement Section, Antitrust Division, United
States Department of Justice, 450 Fifth Street, NW., Suite 7100,
Washington, DC 20530.
The proposed Final Judgment provides that the Court retains
jurisdiction over this action, and the parties may apply to the Court
for any order necessary or appropriate for the modification,
interpretation, or enforcement of the Final Judgment.
VII. Alternatives to the Proposed Final Judgment
The United States considered, as an alternative to the proposed
Final Judgment, a full trial on the merits against Lucasfilm. The
United States is satisfied, however, that the relief contained in the
proposed Final Judgment will quickly establish, preserve, and ensure
that employees can benefit from competition between Lucasfilm and
others. Thus, the proposed Final Judgment would achieve all or
substantially all of the relief the United States would have obtained
through litigation, but avoids the time, expense, and uncertainty of a
full trial on the merits of the Complaint.
VIII. Standard of Review Under the APPA for Proposed Final Judgment
The Clayton Act, as amended by the APPA, requires that proposed
consent judgments in antitrust cases brought by the United States be
subject to a sixty-day comment period, after which the Court shall
determine whether entry of the proposed Final Judgment ``is in the
public interest.'' 15 U.S.C. 16(e)(1). In making that determination,
the Court, in accordance with the statute as amended in 2004, is
required to 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.
15 U.S.C. 16(e)(1)(A) & (B). In considering these statutory factors,
the Court's inquiry is necessarily a limited one as the United States
is entitled to ``broad discretion to settle with the Defendant within
the reaches of the public interest.'' United States v. Microsoft Corp.,
56 F.3d 1448, 1461 (DC Cir. 1995); see generally United States v. SBC
Commc'ns, Inc., 489 F. Supp. 2d 1 (D.D.C. 2007) (assessing public
interest standard under the Tunney Act); United States v. InBev N.V./
S.A., 2009-2 Trade Cas. (CCH) ] 76,736, 2009 U.S. Dist. LEXIS 84787,
No. 08-1965 (JR), at *3 (D.D.C. Aug. 11, 2009) (noting that the court's
review of a consent judgment is limited and only inquires ``into
whether the government's determination that the proposed remedies will
cure the antitrust violations alleged in the complaint was reasonable,
and whether the mechanism to enforce the final judgment are clear and
manageable'').\7\
---------------------------------------------------------------------------
\7\ The 2004 amendments substituted ``shall'' for ``may'' in
directing relevant factors for a court to consider and amended the
list of factors to focus on competitive considerations and to
address potentially ambiguous judgment terms. Compare 15 U.S.C.
16(e) (2004), with 15 U.S.C. 16(e)(1) (2006); see also SBC Commc'ns,
489 F. Supp. 2d at 11 (concluding that the 2004 amendments
``effected minimal changes'' to Tunney Act review).
---------------------------------------------------------------------------
Under the APPA a court considers, among other things, the
relationship between the remedy secured and the specific allegations
set forth in the United States' complaint, whether the decree is
sufficiently clear, whether enforcement mechanisms are sufficient, and
whether the decree may positively harm third parties. See Microsoft, 56
F.3d at 1458-62. With respect to the adequacy of the relief secured by
the
[[Page 81657]]
decree, a court may not ``engage in an unrestricted evaluation of what
relief would best serve the public.'' United States v. BNS, Inc., 858
F.2d 456, 462 (9th Cir. 1988) (citing United States v. Bechtel Corp.,
648 F.2d 660, 666 (9th Cir. 1981)); see also Microsoft, 56 F.3d at
1460-62; United States v. Alcoa, Inc., 152 F. Supp. 2d 37, 40 (D.D.C.
2001); InBev, 2009 U.S. Dist. LEXIS 84787, at *3. Courts have held
---------------------------------------------------------------------------
that:
[t]he balancing of competing social and political interests
affected by a proposed antitrust consent decree must be left, in the
first instance, to the discretion of the Attorney General. The
court's role in protecting the public interest is one of insuring
that the government has not breached its duty to the public in
consenting to the decree. The court is required to determine not
whether a particular decree is the one that will best serve society,
but whether the settlement is `within the reaches of the public
interest.' More elaborate requirements might undermine the
effectiveness of antitrust enforcement by consent decree.
Bechtel, 648 F.2d at 666 (emphasis added) (citations omitted).\8\
In determining whether a proposed settlement is in the public interest,
a district court ``must accord deference to the government's
predictions about the efficacy of its remedies, and may not require
that the remedies perfectly match the alleged violations.'' SBC
Commc'ns, 489 F. Supp. 2d at 17; see also Microsoft, 56 F.3d at 1461
(noting the need for courts to be ``deferential to the government's
predictions as to the effect of the proposed remedies''); United States
v. Archer-Daniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003)
(noting that the court should grant due respect to the United States'
prediction as to the effect of proposed remedies, its perception of the
market structure, and its views of the nature of the case).
---------------------------------------------------------------------------
\8\ Cf. BNS, 858 F.2d at 464 (holding that the court's
``ultimate authority under the [APPA] is limited to approving or
disapproving the consent decree''); United States v. Gillette Co.,
406 F. Supp. 713, 716 (D. Mass. 1975) (noting that, in this way, the
court is constrained to `look at the overall picture not
hypercritically, nor with a microscope, but with an artist's
reducing glass'). See generally Microsoft, 56 F.3d at 1461
(discussing whether ``the remedies [obtained in the decree are] so
inconsonant with the allegations charged as to fall outside of the
`reaches of the public interest.' '').
---------------------------------------------------------------------------
In addition, ``a proposed decree must be approved even if it falls
short of the remedy the court would impose on its own, as long as it
falls within the range of acceptability or is `within the reaches of
public interest.' '' United States v. American Tel. & Tel. Co., 552 F.
Supp. 131, 151 (D.D.C. 1982) (citations omitted) (quoting United States
v. Gillette Co., 406 F. Supp. 713, 716 (D. Mass. 1975)), aff'd sub nom.
Maryland v. United States, 460 U.S. 1001 (1983); see also United States
v. Alcan Aluminum Ltd., 605 F. Supp. 619, 622 (W.D. Ky. 1985)
(approving the consent decree even though the court would have imposed
a greater remedy). To meet this standard, the United States ``need only
provide a factual basis for concluding that the settlements are
reasonably adequate remedies for the alleged harms.'' SBC Commc'ns, 489
F. Supp. 2d at 17.
Moreover, the Court's role under the APPA is limited to reviewing
the remedy in relationship to the violations that the United States has
alleged in its Complaint, and does not authorize the court to
``construct [its] own hypothetical case and then evaluate the decree
against that case.'' Microsoft, 56 F.3d at 1459; see also InBev, 2009
U.S. Dist. LEXIS 84787, at *20 (``[T]he `public interest' is not to be
measured by comparing the violations alleged in the complaint against
those the court believes could have, or even should have, been
alleged.''). Because the ``court's authority to review the decree
depends entirely on the government's exercising its prosecutorial
discretion by bringing a case in the first place,'' it follows that
``the court is only authorized to review the decree itself,'' and not
to ``effectively redraft the complaint'' to inquire into other matters
that the United States did not pursue. Microsoft, 56 F.3d. at 1459-60.
Courts ``cannot look beyond the complaint in making the public interest
determination unless the complaint is drafted so narrowly as to make a
mockery of judicial power.'' SBC Commc'ns, 489 F. Supp. 2d at 15.
In its 2004 amendments, Congress made clear its intent to preserve
the practical benefits of utilizing consent decrees in antitrust
enforcement, adding the unambiguous instruction that ``[n]othing in
this section shall be construed to require the court to conduct an
evidentiary hearing or to require the court to permit anyone to
intervene.'' 15 U.S.C. 16(e)(2). This language effectuates what
Congress intended when it enacted the Tunney Act in 1974, as Senator
Tunney explained: ``[t]he court is nowhere compelled to go to trial or
to engage in extended proceedings which might have the effect of
vitiating the benefits of prompt and less costly settlement through the
consent decree process.'' 119 Cong. Rec. 24,598 (1973) (statement of
Senator Tunney). Rather, the procedure for the public interest
determination is left to the discretion of the Court, with the
recognition that the court's ``scope of review remains sharply
proscribed by precedent and the nature of Tunney Act proceedings.'' SBC
Commc'ns, 489 F. Supp. 2d at 11.\9\
---------------------------------------------------------------------------
\9\ See United States v. Enova Corp., 107 F. Supp. 2d 10, 17
(D.D.C. 2000) (noting that the ``Tunney Act expressly allows the
court to make its public interest determination on the basis of the
competitive impact statement and response to comments alone'');
United States v. Mid-Am. Dairymen, Inc., 1977-1 Trade Cas. (CCH) ]
61,508, at 71,980 (W.D. Mo. 1977) (``Absent a showing of corrupt
failure of the government to discharge its duty, the Court, in
making its public interest finding, should * * * carefully consider
the explanations of the government in the competitive impact
statement and its responses to comments in order to determine
whether those explanations are reasonable under the
circumstances.''); S. Rep. No. 93-298, 93d Cong., 1st Sess., at 6
(1973) (``Where the public interest can be meaningfully evaluated
simply on the basis of briefs and oral arguments, that is the
approach that should be utilized.'').
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IX. Determinative Documents
There are no determinative materials or documents within the
meaning of the APPA that the United States considered in formulating
the proposed Final Judgment.
Dated: December 21, 2010.
Respectfully submitted,
Adam T. Severt,
Ryan S. Struve (DC Bar 495406),
Jessica N. Butler-Arkow (DC 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: (202) 307-6200.
Facsimile: (202) 616-8544.
[email protected].
United States District Court for the District of Columbia
United States of America, U.S. Department of Justice, Antitrust
Division, 450 Fifth Street, NW., Suite 7100, Washington, DC 20530,
Plaintiff, v. Lucasfilm Ltd., 1110 Gorgas Avenue, San Francisco, CA
94129, 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
[[Page 81658]]
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.
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.
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;
4. 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 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. The provision's specific termination date or event.
D. 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, 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
[[Page 81659]]
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.
B. 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
efforts 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:
1. 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) 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 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.
Court approval subject to procedures of Antitrust Procedures and
Penalties Act, 15 U.S.C. 16, United States District Judge.
[FR Doc. 2010-32601 Filed 12-27-10; 8:45 am]
BILLING CODE P