A wave of proposed class actions alleges a cadre of major players in the aerospace engineering industry illegally agreed over nearly a decade to not hire, or “poach,” each other’s skilled workers.
At least six antitrust lawsuits allege Agilis Engineering, Belcan Engineering Group, Cyient, Parametric Solutions, QuEST Global Services-NA, Raytheon, Pratt & Whitney and several executives have entered into “no poach” agreements as a means to reduce competition for workers’ services and fix and suppress salaries, benefits and professional opportunities.
“Simply put, Defendants conspired to drive down the compensation they had to pay their employees, harming those individuals to enrich themselves,” one case says.
Central to the lawsuits is the December 9, 2021 arrest of Pratt & Whitney exec Mahesh Patel for his role as the leader and primary enforcer of the apparent no-poach agreement among the firms. The suits state that Patel, from 2003 through 2020, led the Pratt & Whitney division responsible for retaining the services of Agilis, Belcan, Cyient, Parametric, QuEST and Raytheon to provide outsourced engineers to work on particular projects.
According to the U.S. Department of Justice, Patel, who was indicted alongside five other execs by a federal grand jury in Connecticut on December 15, and his co-conspirators had in place between 2011 and 2019 a mechanism of “interwoven and overlapping hiring and recruiting restrictions” that amounted to a “verbal, handshake” agreement to not hire each other’s employees, one suit reads. The defendants are alleged to have carefully avoided etching the agreement in writing so as to conceal it from workers.
Further, the cases allege the firms monitored each other’s compliance with the no-poach arrangement, including by withholding work from those deemed to have stepped out of line:
“On the rare occasion that Supplier Defendants attempted to break from the agreement by making offers to their rivals’ employees, Patel and his co-conspirators demanded that the deviating party rescind such offers. … After Patel caught one Supplier Defendant offering employment to an Engineer from a competing Supplier, the Supplier wrote to Patel, ‘Per our conversation yesterday, this email is to confirm that we have rescinded the offer letter for’ the engineer. … In addition to demanding that Supplier Defendants rescind offers, Patel also enforced the No Poach Agreement by threatening to withhold work from Supplier Defendants if they failed to comply.”
The agreement among the firms to stay away from each other’s workers amounts to an unlawful and unreasonable restraint of trade, the cases claim.
PDF copies of each lawsuit can be found below.
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