This antitrust class action alleges that a major aerospace company and a number of its outsourcing companies “conspired to restrain competition and reduce compensation for engineers and other skilled workers.” The companies did this, the complaint claims, through no-poach agreements, in which they agreed not to hire each other’s skilled employees.
The class for this action is all natural persons who worked as engineers or other skilled workers in the US, between January 1, 2011 and September 30, 2019, for one or more of the defendants in this case.
Raytheon Technologies Corporation’s Pratt & Whitney Division is a major aerospace company and a defendant in this case. It outsources some of its projects to other companies, including the other defendants ‚ QuEST Global Services-NA, Inc., Belcan Engineering Group, LLC, Cyient, Inc., Agilis Engineering, Inc., and Parametric Solutions, Inc.
In theory, these companies compete with each other for employees, just as they compete with each other for projects, but the complaint alleges that the no-poach agreements began at least by 2011 and continued through at least 2019, involving the companies’ senior executives.
The complaint alleges that the conspiracy was successful: It “reduced competition for Defendants’ employees and suppressed Defendants’ employee compensation below competitive levels. The conspiracy disrupted the efficient allocation of labor that would have resulted if Defendants had competed for, rather than colluded against, their current and prospective employees.”
According to the complaint, the companies knew that this behavior was illegal, because managers and executives mentioned this concern a number of times, yet the companies persisted.
This class action rests on a Department of Justice (DOJ) case that was announced on December 9, 2021, with the arrest of Mahesh Patel, a Pratt & Whitney executive. On December 15, a federal grand jury indicted Patel and five executives of the other companies involved, the other defendants in this case.
The complaint for this class action draws heavily on a document in the DOJ case against Patel, the Affidavit of Christopher Mehring. For example, the complaint quotes the affidavit as saying that Patel “justified the no-hire/no-recruit agreement by appealing to the wage suppression benefits that it provided to the conspirators, either by referring specifically to wages or salaries, or more broadly, to shared costs or prices.”
The affidavit in turns quotes heavily from e-mails between the defendants’ managers and executives, including conveying warnings and rebukes when the companies did attempt to hire each other’s employees or discussing the conspiracy. For example, one set of exchanges between an HR Director and a General Manager openly discuss the issue of illegality and Patel’s insistence that they go along with the scheme.
Article Type: LawsuitTopic: Antitrust
Most Recent Case Event
Pratt & Whitney and Outsourcers No-Poach Agreements Antitrust Complaint
December 31, 2021
This antitrust class action alleges that a major aerospace company and a number of its outsourcing companies “conspired to restrain competition and reduce compensation for engineers and other skilled workers.” The companies did this, the complaint claims, through no-poach agreements, in which they agreed not to hire each other’s skilled employees.
Pratt & Whitney and Outsourcers No-Poach Agreements Antitrust ComplaintCase Event History
Pratt & Whitney and Outsourcers No-Poach Agreements Antitrust Complaint
December 31, 2021
This antitrust class action alleges that a major aerospace company and a number of its outsourcing companies “conspired to restrain competition and reduce compensation for engineers and other skilled workers.” The companies did this, the complaint claims, through no-poach agreements, in which they agreed not to hire each other’s skilled employees.
Pratt & Whitney and Outsourcers No-Poach Agreements Antitrust Complaint