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General Dynamics, others blast US shipbuilding antitrust lawsuit

Posted on December 20, 2023

Dec 19 (Reuters) – U.S. shipbuilding giants General Dynamics (GD.N), Huntington Ingalls (HII.N) and others have asked a federal judge in Virginia to throw out what they called “implausible” allegations that they conspired to suppress compensation for naval architects and marine engineers.

General Dynamics and the other companies in a filing on Monday in Norfolk federal court said the class-action claims lodged in October are well outside the four-year window allowed to sue over alleged violations of U.S. antitrust law.

They also contend there’s no evidence of any agreement among the companies, which include key U.S. military defense contractors.

“Plaintiffs do not allege a single inter-defendant meeting, call, email, or letter — nothing from which the court can infer that the industry-wide agreement they allege actually existed — ever,” the defendants told U.S. District Judge Anthony Trenga.

The lawsuit alleged eight shipbuilders and nearly a dozen engineering consultancies have conspired for years not to recruit from each other, using unwritten agreements to “cheat the highly skilled workers who design the most powerful military fleet in the world out of the competitive wages they deserve.”

The case is among a group of other private civil lawsuits alleging corporate defendants took steps to stifle competition for workers.

A representative for Huntington Ingalls had no immediate comment. General Dynamics did not immediately respond to a request for comment.

Several lead attorneys for the plaintiffs did not immediately respond to a similar request.

The lawsuit, filed on behalf of two named plaintiffs, estimated the class size of engineers and architects in the “tens of thousands.” The filing said the median salary for naval engineers is nearly $100,000.

The plaintiffs said that paying artificially low wages allowed the defendants to “bid for government contracts at lower prices than potential new entrants could bid.”

The companies in their request to dismiss the case said they “independently choose not to actively recruit from competitors,” and in any case the allegations “became time-barred long ago.”

The case is Scharpf v. General Dynamics, U.S. District Court for the Eastern District of Virginia, No. 1:23-cv-01372.

For plaintiffs: Steven Toll of Cohen Milstein Sellers & Toll; Shana Scarlett of Hagens Berman Sobol Shapiro; and George Farah of Handley Farah & Anderson

For General Dynamics: David Barger of Greenberg Traurig; and Douglas Litvack and Michael Doornweerd of Jenner & Block

For Huntington Ingalls Industries: Adam Schwartz of Shearman & Sterling; Sima Namiri-Kalantari and Chahira Solh of Crowell & Moring


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