Boeing 2013 Annual Report Download - page 116

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2013. The parties signed a contract modification effectuating the settlement on January 13, 2014 and, on
January 23, 2014, the parties filed a stipulation of dismissal with the court, voluntarily dismissing the
litigation with prejudice. As a result, the Company recorded a $406 pre-tax charge in 2013, which consists
of writing-off A-12 inventory, recorded as cost of sales, and providing three EA-18G Growlers at no cost
to the U.S. Navy, recorded as a reduction in revenues.
Employment, Labor and Benefits Litigation
In connection with the 2005 sale of our former Wichita facility to Spirit AeroSystems, Inc. (Spirit), certain
individuals not hired by Spirit alleged that Spirit’s hiring decisions following the sale were tainted by age
discrimination, violated ERISA, violated our collective bargaining agreements, and constituted retaliation.
The case was brought in 2006 as a class action on behalf of individuals not hired by Spirit. In 2012, the
Tenth Circuit Court of Appeals affirmed the district court's 2010 summary judgment in favor of Boeing and
Spirit on all class action claims, but the parties were not precluded from making claims on an individual
basis. As of December 31, 2013, eighty-eight individual claims related to this matter were pending. Spirit
has agreed to indemnify Boeing for any and all losses.
Also related to the 2005 sale of the former Wichita facility, on February 16, 2007, an action entitled Harkness
et al. v. The Boeing Company et al. was filed in the U.S. District Court for the District of Kansas, alleging
collective bargaining agreement breaches and ERISA violations in connection with alleged failures to
provide benefits to certain former employees of the Wichita facility. On December 11, 2012 the court denied
plaintiffs’ motion for summary judgment and granted Boeing’s motion for summary judgment on plaintiffs’
claim that amendment of The Boeing Company Employee Retirement Plan violated the IAM collective
bargaining agreement, as well as individual ERISA §510 claims for interference with benefits. The court
denied Boeing’s motion for all other claims. The parties are conducting additional discovery in anticipation
of further court proceedings, which have not yet been scheduled. We believe that Spirit is obligated to
indemnify Boeing for any and all losses in this matter, although to date Spirit has acknowledged a limited
indemnification obligation. We currently estimate that the putative class includes 2,000 former Wichita
employees. We cannot reasonably estimate the range of loss, if any, that may result from both these
matters given the current procedural status of the litigation.
On October 13, 2006, we were named as a defendant in a lawsuit filed in the U.S. District Court for the
Southern District of Illinois. Plaintiffs, seeking to represent a class of similarly situated participants and
beneficiaries in The Boeing Company Voluntary Investment Plan (the VIP), alleged that fees and expenses
incurred by the VIP were and are unreasonable and excessive, not incurred solely for the benefit of the
VIP and its participants, and were undisclosed to participants. The plaintiffs further alleged that defendants
breached their fiduciary duties in violation of §502(a)(2) of ERISA, and sought injunctive and equitable
relief pursuant to §502(a)(3) of ERISA. During the first quarter of 2010, the Seventh Circuit Court of Appeals
granted a stay of trial proceedings in the district court pending resolution of an appeal made by Boeing in
2008 to the case’s class certification order. On January 21, 2011, the Seventh Circuit reversed the district
court’s class certification order and decertified the class. The Seventh Circuit remanded the case to the
district court for further proceedings. On September 19, 2013, the district court granted plaintiffs’ motion
for class certification. On October 3, 2013, Boeing filed a petition for review of the class certification order
with the Seventh Circuit Court of Appeals, which was denied by the Seventh Circuit on November 26,
2013. Summary judgment briefs were filed in the district court on January 6, 2014, and plaintiffs’ opposition
briefs were filed on February 10, 2013. We cannot reasonably estimate the range of loss, if any, that may
result from this matter given the current procedural status of the litigation.