Raytheon, Others Must Face Antitrust Case Over No-Poach Claims

Raytheon Technologies Corp.'s Pratt & Whitney unit and five other aerospace manufacturers lost their bid to end antitrust litigation over their alleged pact pledging to refrain from recruiting one another’s jet propulsion engineers.

Judge Sarala V. Nagala let the case move forward, saying it’s plausible the companies participated in a “no poach” scheme aimed at reducing the wages and mobility of skilled workers in Connecticut, where each of the high-tech manufacturers has a presence.

The ruling came six weeks after executives at some of the same companies, including Pratt & Whitney, failed to shake a parallel prosecution by the Justice Department, which has pivoted in recent years to treating labor market violations as criminal antitrust matters.

The decision also lines up—broadly, at least—with the Federal Trade Commission’s push this year to ban noncompete clauses in employment contracts, a move that could reshape the US labor landscape if it becomes the Biden administration’s formal policy later this year.

Nagala, writing for the US District Court for the District of Connecticut, said the former workers leading the no-poach lawsuit had offered ample direct and indirect allegations about collusion among Pratt & Whitney and the five other companies, which supply its jet engine parts.

The complaint “repeatedly quotes emails where defendants actively discussed the alleged conspiracy,” the judge wrote. “These paragraphs each contain specific allegations, regarding specific employees, of specific defendants, discussing the specific agreement alleged to have violated the antitrust laws.”

Besides Pratt & Whitney, the proposed class action targets Agilis Engineering Inc., Belcan Engineering Group LLC, Cyient Inc., Parametric Solutions Inc., and Quest Global Services-NA Inc.

Nagala noted in her Jan. 20 ruling that the suit includes data showing stagnant salaries for aerospace engineers despite a labor shortage. Those figures imply the companies had a secret source of confidence that their competitors wouldn’t raise salaries to lure away employees, she found.

Though the manufacturers insist there’s an “innocent explanation,” those defenses are for “another day,” the judge added.

She rejected the argument that the companies couldn’t have schemed to divide up the market because they had a “vertical” rather than “horizontal” relationship, meaning Pratt & Whitney got its parts from the other five.

That may be true with respect to the market for jet engines and other aircraft parts, Nagala acknowledged. But in the labor market, all six companies compete for the same limited pool of engineers and skilled workers in related fields, she said.

The judge did, however, hand a win to one of the five suppliers, Quest, finding that its workers had agreed to arbitrate any employment-related claims against the company. It’s up to an arbitrator to determine whether they can proceed on a classwide basis, Nagala said.

DiCello Levitt LLC and Quinn Emanuel Urquhart & Sullivan LLP are interim co-lead counsel for the employees, who are also represented by Hurwitz Sagarin Slossberg & Knuff LLC and Garrison, Levin-Epstein, Fitzgerald & Pirrotti PC.

Pratt & Whitney is represented by Crowell & Moring LLP and Day Pitney LLP. Quest is represented by Latham & Watkins LLP and Reid & Riege PC. Belcan is represented by Kirkland & Ellis LLP and Klingman Law LLC.

Parametric is represented by Gordon Rees Scully Mansukhani LLP. Cyient is represented by Baker & Hostetler LLP, Zeisler & Zeisler PC, and Sheppard Mullin Richter & Hampton LLP. Agilis is represented by Nexsen Pruet LLC and Pullman & Comley LLC.

The case is Borozny v. Raytheon Techs. Corp., Pratt & Whitney Div., D. Conn., No. 21-cv-1657, 1/20/23.