RTX Agrees to $34M Settlement Over Antitrust Hiring Practices
America ı By Rihem Akkouche
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A group of engineers urged a federal judge Wednesday to approve a $34 million settlement with RTX Corp.'s Pratt & Whitney division, resolving claims that the aerospace giant orchestrated a no-hire agreement among five subcontractors to suppress employee wages. This settlement follows a $26.5 million agreement reached earlier this year with the subcontracting firms.
Settlement Terms and Context
The engineers' motion for preliminary approval asks the court to finalize the deal, which would allocate $34 million to a proposed settlement class comprising thousands of current and former employees. The motion emphasized the extensive negotiations and legal battles preceding the settlement, noting that “hundreds of thousands of documents and detailed compensation data” were analyzed during nearly three years of litigation.
“The settlement agreement was negotiated at arm's length by highly experienced counsel after almost three years of hard-fought litigation,” the engineers stated, highlighting the avoidance of costs and risks tied to a complex trial.
Payments to class members will be distributed based on their pro rata share of the settlement fund, determined by their total compensation relative to other class members during the relevant period.
Origins of the Litigation
The lawsuit stems from allegations filed in 2021 after the U.S. Department of Justice (DOJ) pursued criminal antitrust charges against executives from six aerospace engineering companies, including RTX. The DOJ accused the companies of restricting hiring among each other, allegedly to keep salaries artificially low.
However, the criminal case unraveled in 2023 when U.S. District Judge Victor A. Bolden dismissed the charges mid-trial. Judge Bolden ruled that the evidence did not support claims of an illegal labor market allocation since employees could still switch between staffing firms.
Previous Settlements
In July, the engineers secured $26.5 million in settlements with five subcontracting firms, which were accused of participating in the alleged no-hire agreement. The settlements included payments of $9.9 million from Belcan Engineering Group LLC, $8.2 million from Quest Global Services NA Inc., $7.4 million from Cyient Inc., and $1 million from Agilis Engineering Inc.
The fifth subcontractor, Parametric Solutions Inc., filed for bankruptcy and provided additional discovery and cooperation instead of monetary compensation.
The engineers’ agreement with the subcontractors preserved their right to seek further damages from Pratt & Whitney, which the latest settlement now addresses.
Moving Forward
If approved, the $34 million deal will mark the resolution of claims against all defendants in this antitrust case. The settlement aims to compensate employees for wage suppression allegedly caused by the no-hire agreements.
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