US Justice Reed O'Connor of the United States District Court for the Northern District of Texas, Fort Worth Division, has rejected a July 2024 plea deal for up to USD487 million between Boeing and the United States Department of Justice over an "inappropriate" diversity and inclusion provision relating to the mandatory appointment of a safety monitor.

"Among the court’s priorities at this point is to ensure Boeing adheres to an ethics and anti-fraud compliance program overseen by an independent monitor during Boeing’s probation. The plea agreement requires the parties to consider race when hiring the independent monitor. Additionally, the plea agreement marginalises the court in the selection and monitoring of the independent monitor. These provisions are inappropriate and against the public interest," the justice ruled.

The court assessed that while the plea deal included a vague commitment to diversity and inclusion in hiring the monitor, the government offered "shifted and contradictory" explanations as to how it would implement it. In particular, the government was unclear about how it would consider the candidates' race in the selection process. This, the court argued, undermines the public trust in the selection process.

"In a case of this magnitude, it is in the utmost interest of justice that the public is confident this monitor selection is done based solely on competency. The parties’ DEI efforts only serve to undermine this confidence in the government and Boeing’s ethics and anti-fraud efforts," the judge, who according to US media has a history of ruling in favour of conservative causes, said.

The court also criticised the marginalisation of its role in appointing the safety monitor, which, given the history of lax oversight and safety mishaps at Boeing, could undermine the public trust in the process.

The plea deal was opposed by a large number of family members of the victims of the two B737-8 crashes in 2018 and 2019 as a "sweetheart" deal that let Boeing off the hook too easily. The families demanded up to USD24.8 billion in damages and more stringent monitoring procedures.

While the December 5 court ruling acknowledged the families' criticism of monitoring mechanisms included in the plea deal, the agreement was rejected on narrower grounds. The court did not adjudicate on the settlement amount. Nonetheless, lawyers for the families said in a statement they welcomed the rejection of the plea deal as "an important victory".

"Judge O’Connor has recognised that this was a cosy deal between the government and Boeing that failed to focus on the overriding concerns - holding Boeing accountable for its deadly crime and ensuring that nothing like this happens again in the future. This order should lead to a significant renegotiation of the plea deal," Paul Cassell, an attorney for the families, said.

Under the July 2024 plea deal, Boeing would have paid up to USD243.6 million on top of another USD243.6 million from earlier settlements. It would have to accept a government-appointed independent monitor for three years and invest USD455 million to strengthen compliance and safety. It would plead guilty to conspiring to defraud the United States government but avoid a criminal trial. The parties now have 30 days to resubmit a revised plea deal.