United Space Alliance Sues ATK Over Recruiting Practices

WASHINGTON — Unhappy with its share of a NASA contract to help design, build and test the Ares 1 crew launch vehicle, space shuttle operator United Space Alliance (USA) is suing the project’s prime contractor, AlliantTechsystems (ATK).

In a lawsuit filed Aug.
15 in
Florida
‘s Brevard County Circuit Court, USA said it is seeking unspecified damages for fraud and breach of contract.
USA
claims in its suit that Brigham City, Utah-based ATK Launch Systems Group has been aggressively recruiting and hiring
USA
employees while at the same time reducing the shuttle operator’s role on the design and development of the Ares 1 first stage, which is based on the solid-rocket boosters ATK builds for the shuttle.

USA
officials allege in the lawsuit that ATK’s actions constitute fraud and a breach of contract and could jeopardize
USA
‘s ability to support the safe fly out of NASA’s remaining space shuttle missions.

ATK said
USA
has no case.

“
USA
‘s claims are without merit, and ATK is confident we can dispose of the unfounded allegations in an expeditious manner,” ATK spokesman George Torres said Aug. 21. “Further we do not anticipate any negative impact on our ability to carry out contractual obligations for NASA.”

ATK hired
USA
as a subcontractor in 2006 to support the design and development of the Ares 1 main stage, a project that includes a test flight dubbed Ares 1-X that is slated for early 2009. Hardware for that flight already has been built and delivered to NASA’s
Kennedy
Space
Center
with the remainder due to ship out from ATK manufacturing facilities in
Utah
this fall.

USA
spokesman Jeffrey Carr said Aug. 21 that
USA
continues to support ATK under a so-called letter contract that has been extended 16 times since 2006 with
USA
‘s role on Ares 1 reduced each time it has sat down at the bargaining table.
USA
currently has approximately 180 full-time equivalent employees supporting the ATK-led Ares 1 work, according to Carr.

“With each extension
USA
‘s scope of work has been reduced, and ATK has been targeting [for recruitment] the employees who are doing that work,” Carr said.

So far, six key
USA
employees have been hired away by ATK to support its Ares 1 work, according to Carr.

“If you look at the jobs page on the ATK Web site they are advertising dozens of jobs that specifically require the unique skills that these
USA
employees have,” Carr said. Torres said ATK currently has 10 to 12 employees in
Florida
supporting Ares and plans to hire 40 to 50 more by the end of the year. He said ATK has been recruiting in the area but has not deliberately sought out
USA
employees.

“We have not been targeting
USA
employees. We in fact have had multiple job fairs in both
Orlando
and
Cocoa
Beach
back in March and April and we have had over 400 attendees for those for the current job openings we have. We are in fact getting over six resumes per opening from multiple sources including
USA
.”

Carr said
USA
‘s dispute with ATK is no mere disagreement about business etiquette or corporate citizenship.

“We are filing suit for fraud,” Carr said. “We feel like we were fraudulently induced to sign these letter contracts extensions. It’s not a matter of poor form or bad behavior. This is a business legal matter.”

Carr said that under the terms of the agreement between the two companies, ATK is not supposed to hire
USA
‘s employees without prior coordination. Carr also said
USA
employees are not prevented from seeking other job opportunities outside the company.

“We are not trying to stop our employees from making informed decisions about their careers and evaluate other career opportunities; that is not what this is about. It’s about preventing another company’s business plan from destabilizing and threatening a work force and a skill set, which is critical to flying the shuttle safely and successfully through mission complete.”

About 10,000 people work for
USA
, more than half that number are in
Florida
. NASA has said the Ares and Orion Crew Exploration Vehicle programs will not provide full employment for
USA
‘s current work force. Between 3,000 and 6,000 shuttle workers – many of whom currently work for
USA
– are expected to lose their jobs when the shuttle stops flying.

While tensions are running high between
USA
and ATK, Carr said
USA
is not threatening to slow progress on the upcoming Ares 1-X flight.

“Our position is that we are under contract to ATK and we are going to continue to perform in the same outstanding manner that we have been,” Carr said.

Still, the deadline for concluding a long-term contract or at least another extension is fast approaching, and Carr said
USA
continues to be concerned about its eroding scope of work on the project.

“The letter extension expires Sept.
21,”
Carr said. “There’s time here to sort this out. But the bottom line is it’s not our intent to inhibit the progress of Constellation in anyway.”

ATK also does not expect its dispute with
USA
to adversely affect the Ares 1 schedule. “ATK as the prime contractor is putting together the best team possible to carry out this contract and that includes multiple subcontractors including, we expect,
USA
,” Torres said.