Raytheon discloses the second criminal investigation of the American justice | Local


Two of the four main subsidiaries of Raytheon Technical Corp. – including Collins Aerospace – are under investigation by the US Department of Justice for potential violations of federal antitrust law related to employment practices.

Raytheon updated the criminal investigations Friday in its annual regulatory filing. The company initially revealed that it received a grand jury subpoena from the courts in late 2019.

The company said the criminal justice investigation was investigating “alleged agreements not to solicit or hire employees in violation of federal antitrust laws.”

“While the investigation focused on alleged hiring restrictions between and among Pratt & Whitney (another Raytheon subsidiary) and certain of its outsourced engineering service providers, the subpoena also included demands regarding Collins Aerospace.”

The filing revealed that a criminal indictment was filed Dec. 15 in federal court in Connecticut against a former Pratt & Whitney employee and five other employees of certain outsourced engineering vendors.

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According to the Hartford Courant, these individuals were accused of participating in a “long-running conspiracy to restrict the hiring and recruitment of employees within their respective companies.”

These individuals have been charged with one count of violating federal antitrust laws. None were identified in the file.

Raytheon said no current or former Collins employees were named in the indictment.

Collins, which has an operating center in Winston-Salem, had about 1,500 local employees when the brunt of the pandemic began to be felt in mid-March 2020. The company has since declined to provide an update. the local workforce.

It is likely that there have been significant local job cuts over the past 13 months, given that at least 16,500 Collins jobs have been cut across the company during that time.

Raytheon said it is cooperating with the investigation and no criminal charges have been filed against the company or its subsidiaries.

The filing says “numerous civil antitrust class actions” have been filed against Pratt & Whitney and other corporate and individual defendants in federal court in Connecticut.

Civil suits follow a legal path parallel to that of criminal charges.

“Plaintiffs in each of the civil lawsuits seek to represent different alleged classes of engineers and tradespeople employed by Pratt & Whitney and other supplier-defendants since 2011,” according to the filing.

Collins Aerospace has been named a defendant in some of the lawsuits.

Raytheon said it expects the civil lawsuits to be consolidated into a joint complaint.

“We believe that each of these lawsuits is without merit,” Raytheon said. “Based on the information available to date, we do not believe this matter will have a material adverse effect on our results of operations, financial condition or liquidity.”

Second survey

Raytheon has already faced another criminal justice investigation into the company which began in October 2020.

In that investigation, justice officials filed a subpoena to “request information and documents in connection with an investigation relating to financial accounting, internal controls over financial reporting, and cost reporting relating to Missile and Defense activities of Raytheon Company since 2009”.

The investigation relates to multi-year contracts subject to government regulation, including potential civil claims for faulty pricing for three contracts entered into between 2011 and 2013.

In March 2021, Raytheon received a second subpoena seeking documents relating to another contract entered into in 2017.

Raytheon said it is also cooperating with these investigations.

“We have made substantial progress in our internal review of the issues raised by the DOJ investigation,” the company said.

“While we continue to believe we have defenses to potential claims, the company has determined that there is a probable risk of liability for potential damages, interest and penalties.”

As a result, Raytheon said it has racked up $290 million for these potential penalties.

“We are currently unable to estimate any additional loss, if any, that may result from the completion of our internal review and resolution of the DOJ investigation,” the company said.

Raytheon does not believe that the results of the investigation, or any potential civil litigation, will have a material adverse effect on our results of operations, financial condition or liquidity.

As was the case during the last Justice investigation, four shareholder lawsuits have been filed against Raytheon in response to the Missiles & Defense investigation.

A putative securities class action lawsuit has been filed in federal court in Arizona against the company and certain executives “alleging that defendants violated federal securities laws by making material inaccuracies in regulatory filings regarding internal controls over financial reporting in the missile and defense sector”.

A putative class action is defined as a lawsuit brought by one or more named plaintiffs on behalf of a potential group of like-minded individuals.

Three other shareholder derivatives lawsuits have been filed in federal court in Delaware against the former Raytheon Co. board of directors, the company and certain executives.

These lawsuits allege that “Defendants violated federal securities laws and breached their fiduciary duties by engaging in improper accounting practices, failing to implement sufficient internal financial and compliance controls, and making a series of false and misleading statements in regulatory filings”.

Raytheon said in the filing that “we believe each of these lawsuits are without merit.”


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