Boeing Inc. (BA) is facing a class action from a Canadian pilot claiming the company engaged in an “unprecedented cover-up” with the U.S. Federal Aviation Administration related to the 737 Max that damaged the professional and personal lives of more than 400 Max-certified pilots.
Plaintiffs lawyers say Boeing can expect more pilots to file suit.
The plaintiff and purported class members — pilots employed by an unidentified international airline (“Airline X”) — say they continue to suffer significant lost wages as a result of the worldwide grounding of Boeing’s 737 Max series aircraft, as well as emotional harm.
“I think people do need to appreciate what the two step process was here. When we speak to pilots, initially, they're not talking about money, they're not talking about lost wages. When we spoke to a pilot this morning the first words out of his mouth were, ‘I'm outraged at Boeing,’” Patrick Jones, one of the lawyers for the plaintiffs, told Yahoo Finance.
‘A deficit after the grounding of the Max’
Max planes were grounded by the FAA on March 13 following the second of two similar crashes that killed all passengers and crew on board. Shortly after takeoff from Jakarta, Indonesia, on October 29, Lion Air Flight 610 crashed into the Java Sea. Ethiopian Airlines Flight 302 crashed shortly after takeoff from Addis Ababa, Ethiopia, on March 10. Both flights involved a controversial flight system, Maneuvering Characteristics Augmentation System (MCAS), suspected of reacting to errant sensor data. Boeing is currently working to re-certify the aircraft for flight.
Joseph Wheeler, another lawyer for the plaintiffs, said pilots’ financial losses differ significantly by airline and by country, due to differences between collective bargaining agreements and pay scale calculations. Some pay scales are linked to actual flight time, while others are not. “It’s that latter portion of the pay on many carriers that pilots will suffer a deficit after the grounding of the Max,” Wheeler said.
Pilot X, for example, claims his wages have been reduced by about $3,500 per month since the planes were grounded. That’s fairly typical of other pilots the suit seeks to represent, according to Jones. Wheeler and Jones expect to file additional class actions on behalf of pilots of additional airlines.
“In some airlines, some of our clients, in actions that we haven't filed yet...there have been layoffs of pilots altogether,” Wheeler said. “So because they're unable to operate the Max, the pilot no longer has a job, or has no longer been able to move to a higher paying job in another country. We've also got clients who are pilots that have had to relocate their home.”
Plaintiffs claim Boeing implemented design flaws by rushing to manufacture the Max after the company learned in 2011 that its competitor Airbus had obtained commitments from customers to purchase a similar-size, fuel-efficient, single-aisle aircraft, the A320neo. The rush and subsequent fallout, the plaintiffs say, gave rise to their claims for strict liability, negligence, breach of warranty, fraudulent misrepresentation and intentional infliction of emotional distress.
One pilot told Jones that “after the initial Lion Air crash he received a bulletin notifying him about the existence of the MCAS, but he didn't receive any instruction on how to manage the MCAS. He still had to fly those planes.”
In an emailed response to Yahoo Finance, a Boeing representative said the company would not comment on the matter.
‘Speaking out directly may jeopardize their credibility’
When asked whether the lead plaintiff or other plaintiffs would comment on the lawsuit, Wheeler said, for now, their identities must be protected.
“Speaking out directly may jeopardize their credibility with Boeing and the Court,” Wheeler said. In addition, pilots may face difficulty in applying for work.
“There are a lot of difficulties for operating pilots with taking this sort of action,” Wheeler said. “Pilots talk to other pilots, airlines talk to airlines, and everyone talks to Boeing. The employers of our clients are customers of Boeing...and this kind of action can be impliedly or purposely us to weed out pilot applicants in jobs, or to cause them issues in employment.”
Plaintiffs also allege in their complaint that the FAA is responsible for harm caused by the Max grounding. However, under the Federal Tort Claims Act, plaintiffs must first seek an administrative remedy before filing a lawsuit against the regulatory body. Jones said his firm plans to file such an action on Monday.
“We've initiated that process so if we don't have a fair resolution by the end of those six months we will be pursuing the FAA in federal court on behalf of pilots,” Jones said.
“I think what we really want to see is change for the better, change for the future on the whole type certification process,” Wheeler said about his clients’ goals in seeking redress from the FAA. “At the end of the day, if [pilots] are not confident in the product then those products shouldn’t be out there.”
Alexis Keenan is a New York-based reporter for Yahoo Finance. She previously produced and reported for CNN and is a former litigation attorney.
Follow Alexis Keenan on Twitter @alexiskweed.