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US Shipbuilders Seek Dismissal of Wage-Suppression Suits

 |  December 19, 2023

In a recent development, major U.S. shipbuilding companies, including General Dynamics (GD.N) and Huntington Ingalls (HII.N), have jointly requested a federal judge in Virginia to dismiss what they have deemed “implausible” allegations of conspiring to suppress compensation for naval architects and marine engineers.

The companies, known as key players in the U.S. military defense industry, filed a motion on Monday in Norfolk federal court, arguing that the class-action claims, made in October, fall outside the permissible four-year window for suing over alleged violations of U.S. antitrust law.

According to the filing, the shipbuilders asserted that there is no substantial evidence supporting the claims of an industry-wide agreement to suppress wages. They emphasized that the plaintiffs failed to provide any instances of communication such as meetings, calls, emails, or letters among the defendants, essential to substantiate the alleged conspiracy.

The lawsuit, initiated on behalf of two named plaintiffs, implicated eight shipbuilders and nearly a dozen engineering consultancies, alleging a longstanding conspiracy to refrain from recruiting each other’s employees. The alleged unwritten agreements were described as mechanisms to exploit naval architects and marine engineers, depriving them of competitive wages.

The accused shipbuilding giants contested these accusations, asserting that they independently chose not to actively recruit from competitors. They argued that the allegations are time-barred, having exceeded the legal time frame for such claims.

A representative for Huntington Ingalls had no immediate comment on the matter, while General Dynamics did not respond immediately to requests for comment. Lead attorneys for the plaintiffs also remained silent at the time of reporting.

The lawsuit estimated the class size of engineers and architects in the “tens of thousands” and highlighted that the median salary for naval engineers is nearly $100,000. The plaintiffs argued that artificially suppressing wages allowed the defendants to submit lower bids for government contracts, giving them a competitive advantage over potential new entrants.

This case is part of a broader trend of private civil lawsuits alleging that corporate defendants have taken measures to stifle competition for workers. As the legal proceedings unfold, industry observers and stakeholders will closely monitor the developments and their potential implications for the U.S. shipbuilding and defense sector.

Source: Reuters