TQL’s noncompete hurts ex-employee’s job prospects, lawsuit claims

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

A week ago, Patterson, who worked at TQL from August 2007 to April 2021, filed a lawsuit against TQL seeking damages and injunctive relief. His suit, 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 filings, Patterson started looking for employment outside the transportation industry in early August and entered employment discussions with Justin Austin, who was recently promoted to Midwest regional select practice leader/partner for USI Insurance Services. Austin also worked at TQL for seven years, according to his bio on LinkedIn. A month after leaving TQL in December 2020, Austin started 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 largest insurance brokerage and consulting firms in the world, 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 that hiring Patterson would “hurt [USI’s] business relationship” as TQL is a 20-year client of USI.

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

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 suit against TQL, the freight brokerage filed a motion seeking to add PBJ Express, a 43-truck carrier, to the suit, despite Patterson tendering his resignation.

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

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

Using the legal system to stay on top?

Jacob Patterson started at TQL in August 2007 and rose through the ranks to become a senior logistics account executive. He is married with five preteen children and struggled with work-life balance at TQL. He even accepted a lower-earning position to reduce his workload, becoming a senior enterprise account manager to continue to work at the freight brokerage giant, second in size only to C.H. Robinson, headquartered in Eden Prairie, Minnesota. However, after five months in the new role, “his work-life balance was substantially worse,” according to court documents.

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

“My brother left TQL and did not 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 supplier for TQL,” Patterson said.

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

“We looked at the docket of Clermont County Court of Common Pleas for the last five years and there are between 400 and 500 cases with TQL as the plaintiff,” Pete Patterson told FreightWaves. “Now, I don’t know if all of those are over noncompetes; I haven’t looked at the complaints in those cases. But I suspect that the majority, if not the vast majority, of them are.”

TQL: Still the ‘bully on the block’?

Some attorneys who have represented former TQL employees in similar noncompete actions refer to the freight brokerage as the “bully on the block.” They say the company uses the legal system to keep employees from leaving for fear of being hit with a lawsuit and discourages other companies in the transportation industry from hiring its former employees for fear of being sued as well.

Current and former employees say that in March 2020 in the early days of the COVID-19 pandemic, TQL terminated as many as 700 employees over a three-day period because the company didn’t have the technological bandwidth to support all of its employees working remotely.

Ex-employees claim they did not receive severance packages and that their health benefits were canceled within hours after they were terminated. Managers also reminded them of the noncompete agreements they had signed on their first day of employment with the freight brokerage and that it would be enforced if they went to work at another brokerage within one year of leaving TQL.

Desperate for work during the pandemic, some terminated TQL employees asked the freight brokerage to release them from its restrictive noncompete, but it refused.

“TQL uniformly does not make 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 firms now use nonsolicitation agreements in lieu of noncompetes.

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

Legg later formed MegaCorp Logistics, which has a nonsolicitation agreement. His company has filed litigation related to a nonsolicitation agreement only once in its 13-year-history.

“We always thought people should be able to practice their trade; all we ask is that they don’t call on our customers for a year,” Bob Klare, president of MegaCorp, told FreightWaves in a previous article.

President Joe Biden signed an executive order in July 2021 encouraging the Federal Trade Commission (FTC) to ban or limit noncompete agreements.

‘Overbroad’ noncompete leaves former employees guessing 

The big problem with TQL’s noncompete is that “it’s drafted so broadly, everyone knows it’s overbroad and won’t be enforced as written,” said Pete Patterson. “And courts have held that it is overbroad and can’t be enforced as written. But Ohio has a doctrine that authorizes courts to reform overbroad noncompetes.”

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’s a one-way fee-shifting provision in the contract that says if TQL sues under the contract and prevails, the employee is liable for TQL’s attorneys’ fees,” Patterson said. “So it’s like holding a gun to the head of people to expose them to potentially ruinous liability if they guess wrong about how the noncompete will be enforced.”

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Editor: Clarissa Hawes