The 10 Biggest General Dynamics Corporation Lawsuits in Company History
General Dynamics is a technology company that leads the market in providing mission-critical information technologies and systems. The Falls Church, Virginia-based company brings in tens of billions in revenue annually. It supplies technology and systems for combat systems on land. General Dynamics also provides the same for shipbuilding, marine systems, business aviation, armaments, and munitions. You would expect a company that serves such important industries to maintain the highest integrity. General Dynamics has experienced years of legal problems, lawsuits, and penalties for actions deemed illegal or out of compliance. Here are the ten most expensive General Dynamics Corporation lawsuits in the company’s history.
10. General Dynamics Corporation subsidiary penalized for employment discrimination Penalty amount: $2.1 million
The EEOC confirms Gulfstream Aerospace Corporation, a subsidiary of General Dynamics Corporation, was accused of practicing age discrimination against some of its employees. The suit claimed that employees aged 40 and older were laid off ahead of younger employees. Investigations into the reduction of its Savannah, Georgia facility workforce showed a disparity in the age of employees and evidence that younger workers were retained with senior workers let go, regardless of longevity and qualifications. Gulfstream denies engaging in the claimed behaviors but dismissal records and the median ages of the remaining employees support the claims that age-related discrimination occurred in the layoffs from August of 2000 through December of the same year. Gulfstream signed a consent decree approved by the EEOC’s Savannah Office and was made to pay a penalty of $2.1 million in monetary relief for the affected workers. Additionally, Gulfstream was required to provide training for its management and reporting, as well as posting fliers by the company for injunctive and affirmative relief. The case was settled on December 11, 2002, in a federal civil legal action in the state of Georgia led by the Equal Employment Opportunity Commission.
9. CSRA, LLC/General Dynamics Corporation penalized for employment-related offenses and violations Penalty amount: $2,778,123
CSRA, LLC is a subsidiary of its parent company General Dynamics Corporation. A lawsuit was filed against the company alleging that the company committed employment-related offenses with the primary offense of wage and hour violations. Secondary offense claims included Service Contract Act violations. Legal action was taken at the federal level in a civil suit. The Labor Department Wage and hour Division investigated the claims. After a thorough investigation of the records and discussions with key personnel involved in the situation, they determined that the claims of the plaintiffs were substantiated. The Labor Department Wage and hour Division levied a penalty on the company of $2,778,123 to ensure compensation for the victims of unlawful wage and hour practices. The case was settled on July 31, 2017, with CSRA, LLC agreeing to pay the penalty.
8. General Dynamics Armament and Technical Products Inc penalized for False Claims Act violations Penalty: $4,058,750
General Dynamics Armament and Technical Products, Inc. is a subsidiary of its parent company General Dynamics Corporation. The enterprise was accused of committing government-contracting related offenses that violated the False Claims Act. In 2008, the United States Attorney-Eastern District of New York filed a civil lawsuit in federal court, resulting in an investigation of the claims. It was found that General Dynamics Armament and Technical Products, Inc. engaged in acts that violated the False Claims Act when its representatives fraudulently billed the government for Navy aircraft and submarine parts. The company was further accused of manufacturing defective parts that were not tested before being sold to the government. The government claims that such irresponsible actions put the men and women of the armed forces at risk of injury due to the faulty parts that were used. GDATP denies the claims but agreed to settle the case by paying a sum of $4,058.750. The case was settled on August 18, 2008.
7. General Dynamics Corporation charged with unauthorized export of technical data Penalty amount: $5 million
General Dynamics Corporation and General Motors were accused of violating the Arms Export Control Act. Claims made against the companies alleged that they completed the unauthorized export of defense articles, defense services, and technical data to employees who were foreign people and from other countries. The State Department led the investigation and served as the enforcement agency in the matter. Each company received penalties with General Motors paying $15 million in fines and General Dynamics Corporation $5 million. The export of the properties to international sources was considered a distinct and serious violation. Both parties were required to sign a consent agreement to receive the penalties and satisfy them in the administrative agreement completed on November 1, 2004, with the final order signed on October 18, 2006. Both companies learned a valuable lesson about exporting technical and related data and resources without obtaining approval and authorization of the acts. Their actions could have resulted in international complications between the United States and other governments. We’re surprised that criminal charges were not levied against the executives in charge. The companies got off lucky with the fines.
6. General Dynamics sued for breach of contract Settlement amount: $11.87 million
Contractor Misconduct reports that a company called Final Analysis Communication Systems, Inc. filed a lawsuit against General Dynamics for breach of contract, tortuous interference with contractual and business relations and fraud. The plaintiff claimed that General Dynmcial was negligent and misrepresented aspects of the warranty and committed breaches of its contract. The poor contract performance was considered as a part of the judge’s ruling in favor of Final analysis Communication Systems, Inc in a decision made by a jury in September of 2005. FACS was awarded the amount of $19,870,000 after the judge reconsidered the jury’s deliberations. A countersuit filed by General Dynamics against FACS earned the company $8 million for a total of $11,870,000 was the amount General Dynamics Corporation was required to pay in the final judgment ordered on April 17, 2006.
5. Will vs General Dynamics Fiduciary Lawsuit Settlement amount: $15 million
Contractor Misconduct confirms that a civil lawsuit was filed against General Dynamics Corporation involving claims that the defendant violated the Employee Retirement Income Security Act of 1974 laws by charging workers excessive fees on their 401(k) plans. Investigations into the allegations substantiated the claims made by the members of the class-action lawsuit in Will vs General Dynamics. The labor misconduct resulted in General Dynamics Corporation receiving a penalty of o$15.15 million. Under the terms of the settlement agreement, General Dynamics Corporation set up a $15 million settlement fund to compensate the members of the plans who were affected by the excessive fees. This was a case of the neglect of fiduciary responsibility. Employers are required to pay attention to the terms of the 401(k) plans offered to their employees to ensure that the fees charged are reasonable. ERISA violations are serious charges that usually result in high penalties and requirements for violating companies to provide compensation for all those affected. When it goes on for years, the expense can become prohibitive. General Dynamics Corporation learned a valuable lesson about protecting the rights of their workers and being responsible for all of the regulations imposed under the ERISA of 1974.
4. General Dynamics Penalized for 2005 employment-related offenses Penalty amount: $24 million
A class-action lawsuit was filed against General Dynamics Corporation for claims that workers were deprived of wage and hour compensation, specifically, not paid for overtime at the appropriate rate by General Dynamics. The lawsuit was filed in private litigation in the federal Northers District of California civil court. The case name was Fred Giannetto, et al., v Computer Sciences, a subsidiary of General Dynamics Corporation. This action was part of a multistate lawsuit that involved claims that the employer did not provide appropriate overtime compensation for employees who worked the hours that qualified under their respective state laws. A thorough investigation into the claims discovered evidence that supported the claims and wrongdoing on the part of Computer Sciences and General Dynamics Corporation. The court ordered the employer to reimburse the workers for the overtime hours for which they were cheated at the appropriate hourly rate of pay, plus interest and penalties. In some cases, workers in the class-action lawsuit were awarded up to $20,000 each to settle the matter. The lawsuit was officially settled on July 15, 2005. GDC and its subsidiary learned a valuable lesson about following the laws and regulations for ERISA for each state.
3. Forti vs General Dynamics lawsuit for breach of oral contract Settlement amount: $37.4 million
Contractor Misconduct reports that Forti filed a civil lawsuit against General Dynamics Corporation, alleging a breach of oral contract and fraud. The plaintiffs filing the class action lawsuit were former employees at the E-Metrics subsidiary of General Dynamics Corporation. They claimed that General Dynamics promised to provide each of the workers with an equity interest in the E-Metrics company. When General Dynamics transferred the liabilities and assets of E-Metrics to Hughes Aircraft Company in its 1992 sale of the Missile Systems company, the workers were not compensated as promised. The case went to court and the judge ruled in favor of the plaintiffs, ordering General Dynamics Corporation to pay the group a total of $37.4 million in restitution and penalties. The date of the judgment was July 26, 1996. Although the contract with the workers was oral and not in writing, it was still a legal and binding contract requiring fulfillment, as General Dynamics discovered.
2. Lawsuit amount: $75 million
WDAM7 reports that former employees of General Dynamics Information Technology and some present employees filed a lawsuit against the company with allegations that they were underpaid at the Hattiesburg, Mississippi call center. Additional charges allege that GDIF also misclassified their job positions and practiced racial discrimination. The lawsuit asked for compensation of 475 million to reimburse unpaid wages and provide the workers with compensatory damages. The plaintiffs contended that employees were not properly paid for overtime hours they worked. The company additionally purposely misclassified workers to get out of paying them more. They also required workers to perform tasks that were above the classification levels assigned to them and no appropriate compensation was made for the requirements. The court found that General Dynamics Information Technology violated the Fair Labor Standards Act.
1. General Dynamics penalized for violations of the False Claims Act Penalty Amount: $200 million
The United States Department of Justice confirms that General Dynamics Corporation was penalized $200 million for committing violations of the False Claims Act in 2014. The federal lawsuit was filed by the Justice Department Civil Division in civil litigation. The agency investigated claims that General Dynamics Corporation entered into a contract with McDonnell Douglass Corporation, the predecessor of Boeing, in a $4.8 billion contract in 1991, for the Department of the Navy, that ended in a default termination. The case has been ongoing for 23-years with each side offering their legal disputes in the matter. The contract stipulated that General Dynamics and McDonnell Douglas Corporation would develop the A-12 carrier-based stealth aircraft. The contractors agreed to a settlement that would provide aircraft and services to the military for a value of up to o$400 million without charging the government any money for contractors’ claims against the United States. Part of the lawsuit was approved for dismissal by the United States Court of Federal Claims as a part of the settlement agreement to end the dispute that continued for nearly a quarter-century. The settlement date for this epic battle between the aerospace giants and the United States government was January 23, 2014. This is the largest penalty paid by General Dynamics to date.
