Suit seeks lost wages, opportunities after Wabtec’s ‘no-poach’ agreement
Pittsburgh Post-Gazette
Earlier this month, Wabtec Corp. and a foremost competitor in the global rail equipment industry ended an agreement in place since 2009 to refrain from hiring away the other firm’s employees.
The move was part of a settlement with the U.S. Department of Justice, which had scrutinized the companies’ “no-poach” agreement — an arrangement that is illegal under federal antitrust law because it can deprive workers of better wages and job opportunities.
But some employees at the Wilmerding manufacturer and Knorr-Bremse, a German manufacturer of braking systems, want more than that.
A class-action lawsuit filed last week in the U.S. District Court for the Western District of Pennsylvania demands the companies pay workers for the lost opportunities.
“The leaders and most senior executives of Knorr and Wabtec secretly agreed to work together to deprive thousands of their employees — American rail-equipment industry workers — of better compensation and deny them opportunities to advance their careers,” stated the lawsuit, filed by the Philadelphia office of Hausfeld LLP.
The lawsuit’s plaintiff is Travis Carruth, an Arlington, Texas, resident who worked for more than three years as a signal line engineer for Wabtec subsidiary Railroad Controls L.P.
“Without this class action, (workers) will not receive compensations for their injuries, and (Wabtec and Knorr) will continue to retain the benefits of their unlawful collusion,” it read.
In a written statement, a Wabtec spokesman said, “We believe the case is without merit and intend to vigorously defend our position.”
The Justice Department uncovered the agreements while investigating Wabtec’s merger with Faiveley Transport, which was proposed July 2015 and approved the following year. The Justice Department’s findings did not become public until April 3, when it simultaneously charged the companies with an illegal arrangement and announced a settlement.
The companies agreed to scrap the agreement, admitting no wrongdoing. The settlement did not propose any compensation for employees.
The department found the nopoach agreements limited recruiting for project management, engineering, sales, and corporate officer roles, and restricted each company from soliciting current employees from the other company without prior approval.
Faiveley Transport also participated in the agreement until it was purchased by Wabtec and is named as a defendant in the employees’ lawsuit. Hausfeld, which did not estimate damages in the lawsuit, said there could be hundreds, if not thousands” of employees affected.
Wabtec has roughly 18,000 employees worldwide, while Knorr employs more than 25,000 people.