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Aerospace Companies’ No-Poach Agreements Suppressed Pay Antitrust Class Action

This is one of a number of recent antitrust class actions against Raytheon Corporation, its Pratt & Whitney division (P&W), and their outsourcing suppliers, alleging the companies conspired not to hire each other’s skilled aerospace employees. The complaint alleges that such no-poach agreements repress competition, hold down wages, and are illegal under antitrust laws. The plaintiff in this case is named only as John Doe.

The class for this action is all natural persons in the US and its territories employed by the defendants in this case as aerospace engineers or other skilled workers between January 1, 2011 and the present.

Raytheon is the parent of P&W. P&W sometimes assigns a project to one of the outsourcing company defendants, which include Belcan, LLC, Cyient, Inc., Parametric Solutions, Inc. (PSI), and Agilis Engineering, Inc. Also named as defendants are individual executives of these companies, including Mahesh Patel for P&W, who allegedly acted to enforce the agreement. The agreements are alleged to have begun at least as early as 2011 and continued through 2019.

The conspiracy came to light on December 9, 2021, when the Department of Justice revealed a criminal antitrust action against Patel, who, an affidavit said, “served as a leader and primary enforcer” of an agreement “to allocate victim-employees in the labor market in the aerospace industry working on projects for [P&W], specifically by agreeing to restrict the hiring and recruiting of engineers and other skilled-labor employees…” (This document is referred to in the complaint as the DOJ Affidavit.)

The no-poach agreements covered aerospace engineers as well as other skilled employees and independent contractors who worked for the companies. The complaint alleges that the no-poach agreements “artificially extended” the workers’ terms of employment, deprived them of information they might have used to negotiate better compensation and benefits, eliminated other job opportunities, and robbed them of their bargaining power. The complaint claims, “As a result of Defendants’ illegal No-Poach Agreements, Skilled Aerospace Workers experienced artificially suppressed wages and reduced job mobility for nearly a decade.”

The complaint quotes extensively from the DOJ Affidavit, which in turn quotes other sources, such as emails. For example, the complaint quotes a January 2017 email in the DOJ Affidavit in which “Defendant Patel of P&W contacted Defendant PSI after [it] hired a Cyient employee stating, ‘Please do not hire any partners employee, whether they approached, or you approached. That is the only way we can pre[v]ent poaching and price war.’”

Patel, as the customer of the other defendants, carried weight with the outsourcing defendants. If one knew of a violation of the agreements by another, it would report the matter to Patel, the complaint alleges, and Patel would direct the offender to comply with the agreements.

The complaint alleges, “Defendants’ No-Poach Agreement for Skilled Aerospace Workers unreasonably restrained trade in violation of the Sherman [A]ct[.]”

Article Type: Lawsuit
Topic: Antitrust

Most Recent Case Event

Aerospace Companies’ No-Poach Agreements Suppressed Pay Antitrust Complaint

January 7, 2022

This is one of a number of recent antitrust class actions against Raytheon Corporation, its Pratt & Whitney division (P&W), and their outsourcing suppliers, alleging the companies conspired not to hire each other’s skilled aerospace employees. The complaint alleges that such no-poach agreements repress competition, hold down wages, and are illegal under antitrust laws. The plaintiff in this case is named only as John Doe.

Aerospace Companies’ No-Poach Agreements Suppressed Pay Antitrust Complaint

Case Event History

Aerospace Companies’ No-Poach Agreements Suppressed Pay Antitrust Complaint

January 7, 2022

This is one of a number of recent antitrust class actions against Raytheon Corporation, its Pratt & Whitney division (P&W), and their outsourcing suppliers, alleging the companies conspired not to hire each other’s skilled aerospace employees. The complaint alleges that such no-poach agreements repress competition, hold down wages, and are illegal under antitrust laws. The plaintiff in this case is named only as John Doe.

Aerospace Companies’ No-Poach Agreements Suppressed Pay Antitrust Complaint
Tags: Antitrust, No-Poach Agreements