As alleged in the complaint, this is an antirust class action brought on behalf of a proposed Class (defined infra) of engineers and other high skilled workers in the aerospace industry whose wages were suppressed by Defendants’ agreement to restrict hiring or “poaching” of one another’s high skilled workforce (the “No Poach Agreement”).
Defendants include: Agilis Engineering, Inc. (“Agilis”), Belcan LLC (“Belcan”), Cyient, Inc. (“Cyient”), Parametric Solutions, Inc. (“Parametric”), QuEST Global Services-Na, Inc. (“QuEST”) (collectively, the “Supplier Defendants”), and Raytheon Technologies Corporation, Pratt and Whitney Division (“Pratt and Whitney,” and collectively with the Supplier Defendants, “Defendants”).
In a related criminal proceeding, the Department of Justice (“DOJ”) characterized the Defendants’ No Poach Agreement—which was in place from at least 2011 through 2019—as having “undermined the careers of [Defendants’] own workers in order to reap undeserved profits and deprive our fellow citizens of opportunities to earn a competitive wage,” causing “thousands of workers [to be] victimized.” The Defendants’ own characterization of the No Poach Agreement confirms its purpose and effect: their “general aim [wa]s NOT to recruit from the local ‘competition’ because no one wins; salaries rise, the workforce gets unstable, and our margins all get hurt.” Defendants’ own words also confirm that, but for their No Poach Agreement, competition for high skilled workers would “drive the[ir] price structure up” causing “salaries to increase.” Plaintiffs seek to recover damages, trebled, flowing from the Defendants’ No Poach Agreement.
Defendants in this matter are aerospace engineering firms. All Defendants employ aerospace, mechanical, and civil engineers and other high skilled workers, such as, but not limited to, engineering technicians, instrumentation technicians, quality technicians, machinists, welders, and mechanics (collectively, “Skilled Aerospace Workers”). Pratt and Whitney performs aerospace engineering projects inhouse, but also outsources significant volumes of aerospace engineering projects to other aerospace engineering firms (“Outsource Aerospace Engineering Projects”). The Supplier Defendants all employed Skilled Aerospace Workers to perform Outsource Aerospace Engineering Projects for Pratt and Whitney. Defendants all shared a common interest in suppressing the mobility, and in turn, the compensation of, Skilled Aerospace Workers through the No Poach Agreement, but Pratt and Whitney also reaped a unique financial benefit: by suppressing compensation of Skilled Aerospace Workers, Pratt and Whitney also paid the Supplier Defendants less for Outsource Aerospace Engineering Projects than they would have paid if the Supplier Defendants had competitive cost structures. As a result, Pratt and Whitney, through its former Director of Global Engineering Sourcing, Mahesh Patel, took a central role in monitoring and enforcing the No Poach Agreement, including threatening to cut off Supplier Defendants from receiving future Outsource Aerospace Engineering Projects if they did not adhere to the No Poach Agreement.
Federal courts and regulators have consistently concluded that arrangements like Defendants’ No Poach Agreement are unlawful per se under the Sherman Act. A 2016 guidance issued by the DOJ and Federal Trade Commission states that “[n]aked wage-fixing or no poaching agreements among employers, whether entered into directly or through a third-party intermediary, are per se illegal under the antitrust laws.” As with any other per se violation of the antitrust laws, this is true “even if [the employers] are motivated by a desire to reduce costs.” More recent guidance from the DOJ in 2019 explains that such an agreement “[r]ob[s] employees of labor market competition” and “deprives them of job opportunities, information, and the ability to use competing offers to negotiate better terms of employment.” Indeed, at least some Defendants were cautioned that their conduct was illegal, but they persisted nonetheless.
The case has been brought on behalf of a putative Class defined as:
All Skilled Aerospace Workers employed by Defendants in the United States, its territories, and the District of Columbia at any time from the period beginning January 1, 2011 and concluding at such time as the effects of Defendants’ No Poach Agreement ceased (the “Class Period”).
A copy of the complaint can be viewed here:
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