October 9, 2023
Defense contractors General Dynamics (GD.N) and Huntington Ingalls Industries (HII.N) have been sued in U.S. court by naval engineers who allege industry-wide curbs on employee mobility have artificially reduced worker compensation by hundreds of millions of dollars.
The prospective class action lawsuit filed on Friday against General Dynamics, Huntington and various subsidiaries of the two companies alleged a decades-long conspiracy among them and others to refrain from hiring engineers and architects from rival companies. The employees design vessels’ structure, propulsion and other systems.
The “no-poach” agreements at the heart of the case led to what the lawsuit called a “persistent shortage” of qualified naval engineers. Other smaller shipbuilders and some industry consulting firms were also named as defendants.
“The purpose and effect of such agreements is to cheat the highly skilled workers who design the most powerful military fleet in the world out of the competitive wages they deserve,” according to the 75-page complaint in Alexandra, Virginia, federal court.
General Dynamics and Huntington Ingalls declined to comment. Lawyers have not yet made appearances for them in the case.
Antitrust lawsuits focused on labor and employment practices have flourished in recent years. In one of the major cases, engineers accused aerospace companies in Connecticut federal court of wage suppression.
The complaint was filed by plaintiffs’ firms including Cohen Milstein Sellers & Toll; Hagens Berman Sobol Shapiro; and Handley Farah & Anderson.
The lawsuit is a “fight for fair compensation,” said Robert Cobbs of Cohen Milstein, an attorney for the naval engineers. “Defense contractors have profited from their labor while allegedly suppressing their wages below competitive levels,” he said.
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For plaintiffs: Steven Toll of Cohen Milstein Sellers & Toll; Shana Scarlett of Hagens Berman Sobol Shapiro; and George Farah of Handley Farah & Anderson