A US judge has rejected a criminal settlement with Boeing over the 737 MAX crashes, slamming diversity policies at the aviation giant and the Department of Justice (DOJ) that made him "sceptical" of a fair outcome.

In the ruling on Thursday, local time, US District Judge Reed O'Connor blocked the aircraft manufacturer's guilty plea under a deferred prosecution agreement in the case which dates back to two fatal crashes in 2018 and 2019 that killed 346 people.

The deal would have seen the DOJ choose a monitor to ensure that Boeing complies with the agreement.

But Judge O'Connor wrote that diversity, equity and inclusion (DEI) policies at the department left him "sceptical" of its assurances that it would pick a monitor solely based on skill.

"The court is not convinced … that the Government will not choose a monitor without race-based considerations," he said in the 12-page ruling.

He gave the parties 30 days to update the court on next steps in the case.

Under the agreement, the DOJ was to choose six candidates to serve as monitor, and Boeing had the option to strike one of them.

But the judge wrote he feared Boeing would decide which one to strike "in a discriminatory manner and with racial considerations".

He cited Boeing policies committing to goals such as adequate representation of Black people in company leadership.

His ruling criticised the DEI policies at Boeing and the DOJ as "against the public interest".

"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," he said.

"The parties' DEI efforts only serve to undermine this confidence in the Government and Boeing's anti-fraud efforts."

Neither Boeing nor the department provided immediate comment on the ruling.

The ruling comes as DEI policies face increasing attack in US corporate and government spheres, with backers of the initiatives — which seek to correct bias in US workplaces — on the defence even more after Donald Trump's win in the US presidential election.

Paul Cassell, a law professor at the University of Utah who represents families of MAX victims cheered the judge's ruling, calling the agreement a "cosy deal" between Boeing and the DOJ.

"This order should lead to a significant renegotiation of the plea deal to reflect the 346 deaths Boeing criminally caused and put in place proper monitoring of Boeing to ensure that it never again commits a crime like this in the future," Mr Cassell said in a statement.

The DOJ and Boeing reached a deferred prosecution agreement in 2021 after the two crashes, but in May, department officials said the company had violated it, raising the possibility of a new prosecution.

Over the summer, Boeing and DOJ reached a new agreement in which the company agreed to pay an additional $US243.6 million ($377 million) in fines. Boeing has faced renewed scrutiny since January when a panel blew out mid-flight on an Alaska Airlines flight of a 737 MAX.

The judge cited a second basis for rejecting the agreement, concluding that the DOJ's process for restricting the court's oversight of the monitor inappropriately "marginalises" the court in light of the department's record on the case.

"It is fair to say the Government's attempt to ensure compliance has failed," he wrote. "At this point, the public interest requires the Court to step in."

Shares of Boeing dropped 0.7 per cent in afternoon trading.

AFP