A federal judge has rejected the plea deal struck between Boeing and the Justice Department, citing concerns about plans for oversight of an independent monitor and provisions related to diversity.

The deal rejected Thursday was meant to resolve a years-old criminal fraud charge against Boeing after two 737 Max crashes in 2018 and 2019.

Boeing pleaded guilty this year to defrauding safety regulators by failing to disclose information about a then-new software system on the Max planes. An error with that system — the Maneuvering Characteristics Augmentation System, or MCAS — caused the two planes to nosedive and crash, killing a total of 346 people.

The plea deal would have required Boeing to pay a $244 million fine, agree to a three-year probation, and install an independent monitor appointed to oversee the company’s progress on safety and quality improvements.

On Thursday, a federal judge in Texas rejected the deal, sending Boeing and the Justice Department back to discussions.

Judge Reed O’Connor wrote in the Thursday ruling that the proposed deal did not have an appropriate plan for selecting and maintaining oversight of the independent monitor.

The agreement between the Justice Department and Boeing “marginalizes the Court” in selecting the independent monitor, he wrote. Further, it requires the parties to consider race when hiring the monitor.

“These provisions are inappropriate and against the public interest,” O’Connor said.

The families who lost loved ones in the Max crashes had earlier asked O’Connor to reject the deal, arguing that it did not go far enough to hold Boeing and its executives accountable for the deadly crashes.

Sanjiv Singh, an attorney representing some of those families who lost loved ones in the Indonesia crash, said Thursday “we are extremely pleased with the court’s order. Rejecting the plea agreement is a step towards justice for the families victimized by Boeing criminal conduct.”

Mark Lindquist, an attorney representing victims’ families from the second Max crash in Ethiopia, said the ruling was “highly unusual.” He was glad to see that O’Connor wanted there to be more assurance that the appointed monitor “will be truly independent and highly qualified.”

“In my opinion, the judge is sending DOJ a message,” Lindquist said. “‘Do your job. Hold Boeing accountable.’”

Boeing did not immediately comment on the Thursday ruling.

Boeing and the Justice Department previously put criminal charges on hold after entering into a deferred prosecution agreement in 2021.

The Justice Department determined earlier this year that Boeing had violated the terms of that agreement. Days before the deal was set to expire, a piece of fuselage blew off a 737 Max plane midflight, leaving a gaping hole in the side of the plane and reigniting scrutiny about Boeing’s commitment to quality and safety.

Following the government’s determination that Boeing had not complied with the deferred prosecution agreement, the two parties reached a plea deal this summer.

In the agreement, Boeing and the Justice Department said the government would oversee the selection of the independent monitor and Boeing’s compliance with the oversight program.

Judge O’Connor said Thursday that wouldn’t work. The court should be more involved, he said, while casting doubt on the government’s earlier oversight of the airplane manufacturer.

“The Government has monitored Boeing for three years now,” O’Connor wrote. “It is fair to say the Government’s attempt to ensure compliance has failed.

“At this point, the public interest requires the Court to step in.”

O’Connor also said he was concerned with the Justice Department’s guidelines for considering race and other demographic factors when choosing the independent monitor.

The government maintained that its selection process would be “open to all qualified candidates” and “based entirely on merit,” according to the Thursday ruling. But, O’Connor, appointed by President George W. Bush in 2007 described by The New York Times as “a conservative favorite,” said the government had shifted its policies and been contradictory in explaining its diversity-and-inclusion provision.

He also pointed to Boeing’s diversity commitments, which the company recently removed from its website. Boeing also recently dismantled its diversity, equity and inclusion, or DEI, team.

“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,” O’Connor wrote. “The parties’ DEI efforts undermine this confidence in the Government and Boeing’s ethics and anti-fraud efforts.

“The diversity-and-inclusion provision renders the plea agreement against the public interest.”

Boeing and the Department of Justice are expected to meet in coming weeks.

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