(Bloomberg Law) -- The US government’s criminal case against Boeing Co. over two fatal crashes took what legal observers called an unusual turn when a conservative Texas federal judge questioned how diversity practices would affect the selection of an independent safety monitor.
Judge Reed O’Connor, a George W. Bush appointee to the US District Court for the Northern District of Texas, is considering Boeing’s proposed plea deal with the US Justice Department. If approved, that agreement would allow the company to avoid a criminal trial after the agency determined it breached a 2021 deferred-prosecution agreement over the Lion Air Flight 610 and Ethiopian Airlines Flight 302 crashes.
Some relatives of the crash victims characterized the plea agreement announced in July as a “sweetheart deal” and insisted that the court, not the government and Boeing, should appoint an independent compliance monitor. They also questioned a provision related to the DOJ’s “commitment to diversity and inclusion” in choosing the monitor. That prompted O’Connor this week to order further explanation on how the agency’s internal diversity policies will be applied in the case by Oct. 25.
Attorneys and law professors called the move fairly uncommon in the context of plea agreements, with some saying it reflects rising scrutiny from conservatives toward DEI policies and their role in government decision-making and general hiring practices. Courts, they said, don’t question specific internal agency policies unless there’s a clear and direct connection to the issue at hand.
Judges typically “don’t have a lot of say in agreements between the government and companies in this context because usually that’s handled in the deferred prosecution agreement,” Todd Haugh, an associate professor of business law and ethics at Indiana University, said.
What’s different here is that O’Connor has to review and approve it, he said. “But it’s odd that the judge is focused on the DEI provisions when the larger picture should be getting a monitor candidate that has all the right skills and expertise.”
DEI Attacks
O’Connor is a favorite of conservative groups that challenge policies championed by Democratic presidents. He’s issued rulings that reflect a conservative stance on matters related to the advancement of anti-bias workplace protections, including expanded LGBTQ+ rights.
The judge recently blocked a Texas nonprofit’s entrepreneurship coaching and grant program that supports minority business owners on the basis that it’s racially discriminatory. That case settled on Wednesday.
O’Connor’s Oct. 15 inquiry “seems to be a continuation of the general notion that DEI means appointing less qualified people, a rather pernicious take on DEI that has captured much discourse recently,” said Michael Selmi, a law professor at Arizona State University.
DEI continues to face increased legal and political headwinds inspired by the US Supreme Court’s June 2023 Students for Fair Admissions Inc. v. President and Fellows of Harvard College decision, which outlawed the use of race as a factor in college admissions.
Diversity and inclusion have already factored into cases related to Boeing prior to the plea agreement. The Texas attorney general launched a probe into whether a Boeing supplier’s diversity commitments caused aircraft safety and manufacturing issues. Critics of DEI efforts maintained that such policies promote divisiveness and undermine merit-based decision-making.
Boeing and the DOJ have publicly acknowledged their commitments to DEI, the judge’s order said. The department’s policy is part of an executive order President Joe Biden signed in 2021 to boost diversity, equity, and inclusion efforts within the federal workforce.
O’Connor’s Questioning
The judge asked for details on how the department’s DEI policy promotes safety and compliance efforts, and addresses Boeing’s “fraudulent misconduct” and what role Boeing’s internal diversity focus impacts its compliance and ethics obligations. Boeing must also explain how it will apply internal diversity commitments to exercise its right to strike a monitor applicant.
The judge seems concerned about whether the plea agreement will adequately punish Boeing for violating the government’s deferred prosecution agreement, failing to comply with federal safety rules, and deterring future conduct, said a white-collar criminal defense attorney at a global law firm, who spoke on condition of anonymity.
“I am sure that’s fueled by the increased scrutiny from the family members of the victims and the advocacy there, and frankly the impact that this could have on the judge’s legacy if he allows a process to continue that is not appropriately vetted,” the attorney said.
“These are legitimate questions the judge is asking of the government and Boeing to assess and probe to ensure that the right monitor who’s qualified will be appointed and not at the detriment of some policy that more directly relates to diversity and inclusion,” the lawyer added.
Boeing declined to comment. The DOJ didn’t immediately respond to a request for comment.
‘More Ammunition’
But Haugh of Indiana University said the judge’s inquiry could give “more ammunition” to DEI foes already critical of Boeing.
“You have a federal judge who has apparently been very outspoken and in conservative circles and now questioning this,” he said. “There’s a potential for a rethink by the Department of Justice about exactly what they’re interested in pursuing related to diversity.”
Federal law generally prohibits decisions based on protected characteristics such as race, color, and national origin.
However, efforts designed to bring in a roster of compliance monitors with a wider range of perspectives and backgrounds are legitimate because the field has long been “overwhelmingly homogeneous,” Haugh said.
Compliance monitors are usually from “big law firms, tend to be well-connected people, older, and male with similar skills and abilities,” he said. There’s no indication that they’ve excelled at reforming corporate culture and stopping wrongdoing, Haugh added.
“If a judge really cares about getting the best monitor, what I think the judge should be doing is questioning skills and expertise and not worrying probably so much about the DEI provision,” he said.
The case is US v. The Boeing Co., N.D. Tex., 4:21-cr-00005 21-cr-005, order 10/15/24.
To contact the reporter on this story: Khorri Atkinson in Washington at katkinson@bloombergindustry.com
To contact the editors responsible for this story: Genevieve Douglas at gdouglas@bloomberglaw.com; Jay-Anne B. Casuga at jcasuga@bloomberglaw.com
(Updates the 17th paragraph to reflect that Boeing declined to comment.)
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