Shipbuilders Employee Compensation Lawsuit: Claims and Class Scope

The shipbuilders employee compensation lawsuit is a class action brought in October 2023 by two former naval architects who allege that 20 of the country’s largest shipbuilders, naval-engineering consultancies, and a maritime recruiting firm ran a secret, decades-long agreement not to recruit each other’s workers, holding down pay for thousands of naval architects and marine engineers. The case, Scharpf v. General Dynamics Corp., was dismissed in 2024 as untimely, revived by the Fourth Circuit in May 2025, and, as of mid-2026, is winding down through a series of settlements with most defendants.

What the Lawsuit Alleges

The complaint, filed October 6, 2023, in the U.S. District Court for the Eastern District of Virginia, describes what the plaintiffs call a “gentlemen’s agreement” among competing shipbuilders and engineering firms not to actively recruit one another’s naval architects and marine engineers.¹ The plaintiffs say the pact took shape as early as the 1980s and became “ubiquitous” across the industry by 2000.²

According to the complaint, the arrangement was deliberately kept unwritten. Executives passed instructions to managers verbally, and participants used coded language: competitors whose workers were off-limits were called “friends,” or firms would say they had “a relationship” with a given company.¹ Companies allegedly kept “do not hire” lists of allied firms. When an employee applied on their own, the prospective employer would contact the current one to confirm the applicant had not been poached, sometimes asking the applicant to verify the same.³

The plaintiffs say the effect was to eliminate competitive bidding for talent in an industry already built on a small, specialized labor pool. Roughly 40% of naval engineers work for shipbuilders and another 40% work for consultancies, meaning the alleged conspiracy covered most available employers. Despite an industry-wide shortage of naval engineers that would normally push pay up, the complaint says the arrangement produced “relatively uniform compensation structures” and salaries well below what a competitive market would have set.¹ The suit seeks recovery of what it calls “hundreds of millions of dollars in compensation” that workers were allegedly denied.²

The legal theory is a Sherman Act claim that the no-recruit agreement is a per se illegal restraint of trade.¹

Who Is Suing and Who Is Being Sued

The named plaintiffs are Susan Scharpf and Anthony D’Armiento, both former naval architects who worked for defendant companies at various points between 2002 and 2013.³ They are pursuing the case on behalf of a proposed class of anyone who worked as a naval architect or marine engineer for the defendants at any time since January 1, 2000.² Cohen Milstein Sellers & Toll is lead counsel, joined by Hagens Berman Sobol Shapiro, Handley Farah & Anderson, Berger Montague, and Lockridge Grindal Nauen.⁴

The 20 defendants named in the complaint span the naval shipbuilding and engineering industry:

General Dynamics Corporation, Bath Iron Works, Electric Boat Corporation, and General Dynamics Information Technology.
Huntington Ingalls Industries, Newport News Shipbuilding and Dry Dock Co., Ingalls Shipbuilding, HII Mission Technologies Corp., and HII Fleet Support Group LLC.
Marinette Marine Corporation and Bollinger Shipyards, LLC.
Engineering consultancies Gibbs & Cox, Serco, BMT International, Technology Financing Inc., CACI International, The Columbia Group, Thor Solutions, and Tridentis.
Faststream Recruitment Ltd., a maritime recruiting firm.³

Plaintiffs’ counsel has also identified NASSCO Holdings, Austal USA, and BAE Systems Ship Repair in connection with a broader investigation.⁵

How the Case Survived a Dismissal

The lawsuit nearly ended before it began. On April 19, 2024, Senior District Judge Anthony Trenga dismissed the case, finding the claims barred by the Sherman Act’s four-year statute of limitations.⁶ The plaintiffs argued the clock should be paused because the defendants actively concealed the conspiracy; Judge Trenga disagreed, concluding that keeping an agreement off paper was “simply a failure to admit wrongdoing” and not affirmative concealment. The plaintiffs said they had only discovered the alleged conspiracy in April 2023 through interviews with industry insiders, so without tolling, the case was untimely.¹

On May 9, 2025, a divided Fourth Circuit panel reversed and sent the case back to district court.⁷ Writing for the majority, Judge Wynn held that deliberately keeping an agreement unwritten to avoid detection is itself an “affirmative act of concealment” sufficient to toll the statute of limitations. There is no meaningful difference, the court said, between defendants who destroy evidence and defendants who take active steps to avoid creating it. Coded language, oral-only instructions, and private executive calls together pointed to a “deliberate scheme to avoid scrutiny.”¹ Chief Judge Diaz dissented. He argued that the majority effectively applied a broader “self-concealing” standard while claiming to use the stricter “affirmative-acts” test the Fourth Circuit has adopted.⁸ The full Fourth Circuit denied rehearing en banc on June 13, 2025.

General Dynamics and other defendants petitioned the U.S. Supreme Court on September 11, 2025, asking whether maintaining an unwritten agreement is enough to establish fraudulent concealment.⁹ The U.S. Chamber of Commerce and the National Association of Manufacturers filed an amicus brief arguing the Fourth Circuit’s ruling “upends the settled rule” on concealment and would expose employers to “indefinite liability for ancient conduct that cannot be fairly defended.”¹⁰ The Shipbuilders Council of America also filed a supporting brief.¹¹ On January 12, 2026, the Supreme Court asked the Solicitor General to weigh in, a step that often signals serious consideration.¹²

Where the Case Stands in 2026

Back in district court, Judge Trenga denied the defendants’ renewed motion to dismiss on November 26, 2025, citing the “incestuous” nature of the small, geographically concentrated industry and defendants’ strong incentives to avoid competing over a limited pool of engineers with specialized training, security clearances, and citizenship requirements.¹³

Defendants then began peeling off. Faststream Recruitment agreed in March 2024 to cooperate with the plaintiffs by sharing compensation data and communications covering naval engineers from 2000 onward, in exchange for dismissal. Faststream paid no money and admitted no liability.¹⁴ Gibbs & Cox filed a notice of settlement in January 2026.² By March 2026, affiliates of Huntington Ingalls, Marinette Marine, and Serco had also reached settlements on undisclosed terms.¹⁵ In April 2026, the court granted the plaintiffs leave to add a new plaintiff.⁷

The General Dynamics entities took a different path. On May 18, 2026, General Dynamics told the Supreme Court that the plaintiff had voluntarily dismissed her claims against those entities and that the remaining defendants “either have settlements in principle with the plaintiffs, or are in the process of negotiating them.” General Dynamics stressed that it did not settle, paid nothing, and would eventually ask the Court to vacate the Fourth Circuit’s judgment as moot. It asked the Court to hold the cert petition in abeyance in the meantime.¹⁶ As of mid-2026, the Solicitor General has not filed the requested brief.⁹

Because the pending settlements involve class-wide claims, they require formal court approval, a process General Dynamics’ counsel estimated could take months.¹⁶ Unless the Supreme Court takes the case or vacates the ruling, the Fourth Circuit’s decision on fraudulent concealment stands as binding precedent.

Who the Class Would Cover

If the case reaches final class certification and approved settlements, the proposed class covers anyone who worked as a naval architect or marine engineer for any of the defendants at any point from January 1, 2000, forward.² The lawsuit does not cover shipyard tradespeople, production workers, or other job classifications outside naval architecture and marine engineering; the alleged agreement, as pleaded, concerns recruiting for those specialized engineering roles.³ Workers who believe they fall within the class should watch for court-approved notice as individual settlements move toward approval.

1
Justia. Scharpf v. General Dynamics Corp., No. 24-1465
2
Hagens Berman Sobol Shapiro LLP. Naval Architects and Marine Engineers Wage-Fixing Antitrust
3
ClassAction.org. Scharpf Et Al v. General Dynamics Corp. Et Al, Complaint
4
Cohen Milstein. Shipbuilders Can’t Escape Revived No-Poach Claims
5
Grabar Law. Naval Worker Wage-Fixing Investigation
6
Virginia Lawyers Weekly. Antitrust Sherman Act Claims Dismissed as Untimely
7
Cohen Milstein. Scharpf Et Al v. General Dynamics Corp. Et Al
8
U.S. Supreme Court. Scharpf Petition Appendix
9
SCOTUSblog. General Dynamics Corp. v. Scharpf
10
HR Dive. SCOTUS Shipbuilders No-Poach Dispute
11
U.S. Supreme Court. Docket No. 25-293
12
U.S. Supreme Court. Docket No. 25-293
13
Brown Sims. January 2026 Longshore Maritime Update No. 320
14
Reuters. Recruiter to Cooperate in Deal With Workers Suing Major Shipbuilders
15
Cohen Milstein. Shipbuilders Cut Deals to End No-Poach Claims
16
U.S. Supreme Court. Letter Re Dismissal, No. 25-293