Class Action Alleges Aerospace Firms Conspired Not to Compete for Industry Workers

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A proposed class action alleges a Raytheon Technologies division and other aerospace engineering firms unlawfully agreed to restrain competition, and thereby suppress wages, in the labor market in which they compete for employees. 

The 32-page suit charges that Raytheon unit Pratt & Whitney, QuEST Global Services, Belcan Engineering Group and a number of others entered into “no-poach” agreements whereby they agreed not to compete with each other to attract, hire and retain engineers and other skilled workers in the aerospace industry. According to the lawsuit, this arrangement was in place from at least as early as 2011 through at least 2019, a time in which the defendants’ senior executives and managers conspired not to “solicit, recruit, hire without prior approval, or otherwise compete for employees,” per the case. 

Overall, the alleged conspiracy “disrupted the efficient allocation of labor” that would have existed had the companies competed for current and prospective employees. As the complaint tells it, the apparent no-poach agreement among the defendants was unnecessary for any separate, legitimate business transaction or collaboration among the companies. 

“Rather, Defendants’ conspiracy was an ideal tool to suppress their employees’ compensation that was simple to implement and easy to enforce,” the case reads. 

Although the defendants were able to conceal the apparent conspiracy for years, the United States Department of Justice (DOJ) unsealed on December 9, 2021 a criminal complaint against a former Pratt & Whitney manager for allegedly “participating in a long-running conspiracy with managers and executives of several outsource engineering suppliers [] to restrict the hiring and recruiting of engineers and other skilled laborers among their respective companies.” 

The lawsuit more specifically states that the alleged no-poach conspiracy stemmed from Pratt & Whitney’s outsourcing arrangements with other engineering firms, including some of its co-defendants (listed below), to complete a particular project for which the other firms would assign workers from among their own employees in exchange for an agreed-upon payment from Pratt & Whitney for the work. The complaint says that although the outsource engineering companies might be considered “suppliers” of labor to Pratt & Whitney, the company and the outsourcers nevertheless compete with each other for engineers and other skilled employees. 

The lawsuit stresses that the DOJ’s investigation and forthcoming prosecutions will not compensate the defendants’ employees who the case says were harmed by the companies’ anticompetitive conduct: 

“Without this class action, Plaintiff and the Class will be unable to obtain compensation for the harm they suffered, and Defendants will retain the benefits of their unlawful conspiracy.” 

The suit relays that there exists a high demand for and limited supply of skilled employees with the requisite experience and knowledge for the aerospace industry. In a competitive labor market, the case says, aerospace employers would compete with one another in a way that ultimately benefits employees, who’d be afforded more job opportunities and the ability to negotiate for a better salary and benefits. 

The complete list of defendants in the suit includes Pratt & Whitney, QuEST Global Services-NA, Belcan Engineering Group, Belcan Engineering Group Limited Partnership, Cyient Inc., Parametric Solutions, Agilis Engineering, and six high-ranking executives at the companies. 

The case looks to represent all natural persons employed by Pratt & Whitney, QuEST, Belcan, Cyient, Parametric, Agilis or their wholly owned subsidiaries as engineers or other skilled employees at any time from at least as early as 2011 to at least September 2019. 

On the same day the case detailed on this page was filed, some of the same defendants were hit with another proposed class action by four other plaintiffs over alleged antitrust violations. 

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