A collection of aerospace companies has agreed to settle with workers who alleged that the companies engaged in an illegal no-poach agreement with one company, Cyient, Inc., set to pay $7.4 million, according to court documents filed Wednesday.
The news represents the latest development in a nearly three-year-long dispute before the U.S. District Court for the District of Connecticut.
In 2021, the U.S. Department of Justice sued a former executive at Raytheon subsidiary Pratt & Whitney, alleging that he participated in a “long-running conspiracy” with managers and executives at outsource engineering suppliers to restrict hiring and recruiting of the companies’ engineers and other skilled workers.
The case at issue in the Wednesday settlement also dates back to 2021. It is a class-action complaint filed by workers against the companies and executives alleged to have maintained the no-poach agreement.
Per the workers’ original complaint, DOJ’s criminal investigation and prosecutions “will not compensate employees of Defendants who were harmed by Defendants’ anticompetitive conduct” and, without the class action, the workers would “be unable to obtain compensation for the harm they suffered, and Defendants will retain the benefits of their unlawful conspiracy.”
In addition to Cyient, QuEST Global Services-North America, Inc., Parametric Solutions, Inc., and Agilis Engineering, Inc. also reached settlement agreements with the plaintiffs, but terms were not disclosed. Plaintiffs said in court documents that they would file a motion for preliminary approval of the settlements.
Last April, a federal judge acquitted six executives named in the DOJ’s suit, holding that the alleged agreement between the parties did not constitute an allocation of the relevant employment market in violation of federal antitrust laws.
DOJ and other federal regulators have signaled an intent to crack down on no-poach agreements in recent years, but the results have been mixed. In November, DOJ abandoned its first-ever no-poach criminal indictment. In 2022, however, the agency obtained a guilty verdict in a case involving the contractor of nursing services for a Nevada school district, which was ordered to pay $134,000 in penalties by a district court judge.