Saturday, October 1 2022

Wednesday is Jacob Patterson’s last day at PBJ Express, a small trucking company in Joplin, Missouri, where he has worked for 15 months. He tendered his resignation two weeks ago after discovering that his former employer, Cincinnati-based Total Quality Logistics, intended to file a motion to add PBJ as a defendant in an ongoing lawsuit against him for allegations that he violated the terms of his non-compete agreement after leaving the United States’ second-largest freight brokerage firm in April 2021.

A week ago, Patterson, who worked at TQL from August 2007 to April 2021, sued TQL for damages and injunctive relief. His lawsuit, filed in Clermont County, Ohio, alleges the case “demonstrates the extraordinary measures TQL will take to harm the career prospects of an employee who has the temerity to leave the company.”

According to court documents, Patterson began looking for employment outside the transportation industry in early August and entered into employment discussions with Justin Austin, who was recently promoted to chief of staff. / Midwest regional partner for USI Insurance Services. Austin also worked at TQL for seven years, according to his LinkedIn biography. A month after leaving TQL in December 2020, Austin began working at USI as vice president of transportation and logistics in its property and casualty division.

USI, headquartered in Valhalla, New York, is one of the world’s largest insurance brokerage and advisory firms, according to its website.

However, employment talks with Patterson ended two weeks later after Austin spoke with Chris Brown, TQL’s general counsel. According to court documents, Austin was told hiring Patterson would “harm [USI’s] business relationship”, as TQL has been a USI customer for 20 years.

“On behalf of my brother, we have now sued TQL, alleging that it interfered with his efforts to find employment outside of the trucking industry,” said Pete Patterson, Jacob Patterson’s brother and partner at the firm. litigation boutique based in Washington. Cooper and Kirk.

According to court documents, “[Jacob] Patterson is bringing this action to end TQL’s economic bullying so he can move on with his life and career. »

Timothy Denton, vice president of corporate communications and media relations at USI, and TQL’s Brown did not respond to FreightWaves’ requests for comment.

Two days after Patterson filed a lawsuit against TQL, the freight brokerage firm filed a motion to add PBJ Express, a 43-truck carrier, to the suit, despite Patterson’s resignation.

Matthew Wiles, a transportation and non-competition attorney representing TQL in the action, confirmed that his firm, Wiles Law of Upper Arlington, Ohio, had “filed a motion to add another party to the lawsuit.”

“[B]Beyond that, without speaking to TQL, I’m not authorized to say anything, other than to direct you to the publicly available record,” Wiles told FreightWaves.

Using the legal system to stay on top?

Jacob Patterson started at TQL in August 2007 and worked his way up to Senior Logistics Account Manager. He is married with five pre-teen children and struggled to balance work and personal life at TQL. He even took a lower-paying position to reduce his workload, becoming a senior corporate account manager to continue working at the freight brokerage giant, second in size to CH Robinson, headquartered in Eden Prairie. , Minnesota. However, after five months in the new role, “his work-life balance was significantly worse”, according to court documents.

Pete Patterson has been embroiled in his brother’s legal battle since May 2021 over TQL’s claims that Jacob Patterson breached his non-compete when he went to work for asset-based carrier PBJ Express.

“My brother left TQL and didn’t want to do anything improper, so he didn’t go to work for a broker. But he went to a trucking company, which was a TQL supplier,” Patterson said.

The same month he accepted the position of vice president of operations at PBJ Express, Jacob Patterson was hit with a lawsuit from TQL.

“We have reviewed the Clermont County Court of Common Pleas role over the past five years and there are between 400 and 500 cases with TQL as plaintiff,” Pete Patterson told FreightWaves. “Now I don’t know if this is all about non-competitions; I have not reviewed the complaints in these cases. But I suspect the majority, if not the vast majority, of them are.

According to the non-competition clause signed by Jacob Patterson, it prohibits him from working for a competing company – defined as “any person, firm, corporation or entity engaged in the shipping, third party logistics, freight brokerage, brokerage trucks or supply chain management”. services in the continental United States” for one year after leaving TQL.

The freight brokerage company’s overly broad language in the non-competition is so broad that it would even bar it from driving for DoorDash, the lawsuit says.

TQL: Still the “tyrant on the block”?

Some attorneys who have represented former TQL employees in similar non-competition actions are calling the freight brokerage firm a “bully on the block.” They say the company uses the legal system to prevent employees from leaving for fear of being sued and discourages other companies in the transport sector from hiring their former employees for fear of being sued as well.

Current and former employees say that in March 2020, at the start of the COVID-19 pandemic, TQL laid off up to 700 employees over a three-day period because the company did not have the technology bandwidth to support all its employees working remotely.

Read more: TQL: 2

The former employees claim that they did not receive severance packages and that their health benefits were canceled hours after their layoff. The managers also reminded them of the non-competition agreements they had signed on their first day of employment with the freight brokerage company and that they would apply if they went to work at another brokerage company in the year following their departure from TQL.

Desperate to work during the pandemic, some laid-off TQL employees asked the freight brokerage to release them from its restrictive non-competition, but it refused.

“TQL uniformly makes no exceptions to the agreement, including the one-year non-compete and non-solicitation terms,” ​​a TQL attorney told a former employee via email.

Many rival logistics companies are now using non-solicitation agreements instead of non-competition.

Ken Oaks and Ryan Legg co-founded TQL in 1997, but the two parted ways 16 years ago.

Legg then formed MegaCorp Logistics, which entered into a non-solicitation agreement. His company has only filed one lawsuit related to a non-solicitation agreement in its 13-year history.

“We have always thought that people should be able to do their job; all we’re asking is that they don’t call our customers for a year,” Bob Klare, president of MegaCorp, told FreightWaves in a previous post.

President Joe Biden signed an executive order in July 2021 encouraging the Federal Trade Commission (FTC) to prohibit or limit non-compete agreements.

‘Large-scale’ non-competition leaves ex-employees guessing

The big problem with TQL’s non-competition is that “it’s written so broadly that everyone knows it’s too broad and won’t be enforced as written,” Pete Patterson said. “And the courts held that it was too broad and could not be applied as written. But Ohio has a doctrine that allows the courts to reform overly broad non-competitions.

He said the problem for people in his brother’s position is that they can’t read the contract to know what they can or can’t do.

“There is no clearly defined line. And then, to make matters worse, there is a one-way fee transfer provision in the contract which states that if TQL sues under the contract and wins, the employee is responsible for TQL’s attorney fees,” Patterson said. “So it’s like holding a gun to people’s heads to expose them to potentially ruinous liability if they’re wrong about how whose non-competition will be applied.”

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Click for more articles from Clarissa Hawes.

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