Boeing to Create Ombuds Program as Part of Settlement in 737 MAX Lawsuit

Last week, shareholders reached a settlement in a derivative lawsuit against the American multinational aerospace corporation related to the unsafe 737 MAX aircraft. In addition to paying about $225 million, Boeing agreed to a number of remedial measures including the appointment of an Ombuds to provide a channel for employees to raise work-related concerns. The settlement approved by the Delaware Court of Chancery, explicitly requires the new Boeing Ombuds to follow IOA standards and be in place for five years. 

Here is the relevant portion of the court's order: 

VIII. Ombudsperson Program 

A. Within nine (9) months of the Date of the Scheduling Order, the Company shall implement an Ombudsperson Program, within the organization of the Chief Aerospace Safety Officer, providing an additional channel for Unit Members in the FAA’s ODA program to raise work-related concerns, including any concerns relating to independence and transparency. The Ombudsperson shall report to the Chief Aerospace Safety Officer and shall be selected and/or removed in consultation with the Aerospace Safety Committee. The Ombudsperson shall serve as a neutral third party to advise and assist Unit Members with any concerns that they may raise, including where appropriate directing the Unit Member to the Company’s existing mechanisms for investigating and reporting undue pressure allegations to the FAA. The Ombudsperson may request information related to the status of concerns brought to his or her attention, including associated communications between the Company and the FAA. The Ombudsperson shall strive for impartiality, fairness, and objectivity in the treatment of persons and consideration of issues, and shall be an advocate for the adherence to Company policies, practices, values and standards. The Ombudsperson shall apprise management and the Aerospace Safety Committee of significant issues raised by Unit Members in a manner that protects the confidentiality of the Unit Member. 

B. Subject to the provisions of Paragraph VIII.A., and consistent with the guidance set forth by the International Ombudsman Association, the Ombudsperson shall protect the confidentiality of Unit Members who raise issues or concerns to the extent confidentiality is requested, to help ensure that a Unit Member’s use of the Program shall be without fear of reprisal or retaliation. Notwithstanding the confidentiality procedures, the Ombudsperson shall comply with all applicable laws and legal obligations, including corporate disclosure and other regulatory requirements. 

C. The Ombudsperson shall meet with the Aerospace Safety Committee in its executive session at least once a year, and shall have the authority to communicate directly with the Aerospace Safety Committee at any time if in his or her discretion the issues are not being adequately addressed by management.

(Stipulation and Agreement of Compromise, In Re the Boeing Co., Derivative Litigation; Office of the NY State Comptroller Press Release.)

Other large companies have settled lawsuits or regulatory actions (especially EEOC cases) with agreements to create Ombuds programs. In most cases, the details are sparse and later it is impossible to locate any public information regarding the promised Ombuds program. Coca-Cola, Pfizer, and Pinterest are notable exceptions.

Related posts: Nike Settles Discrimination Lawsuit, Agrees to Ombuds (2007); Cheesecake Factory Agrees to Ombuds Program in Settlement with EEOC (2009); Settlement of Class Action Filed by American Indian Farmers Will Create New Federal Ombuds Program (2010); Court Approves Settlement Creating Ombuds Program for Pfizer (2011); Pinterest Board Agrees to Create Ombuds Program for Employees (2020).