Since leaving Total Quality Logistics in April 2021, ex-broker Jacob Patterson has been embroiled in a legal battle with the Cincinnati-based freight brokerage over claims that he has violated his noncompete agreement twice in the past two years.
The latest suit, filed by TQL on May 12 in Ohio’s Clermont County Court of Common Pleas, claims Patterson breached his noncompete agreement by founding a freight brokerage, Hyperlux Logistics, in January. TQL is seeking damages and injunctive relief against Patterson and Hyperlux Logistics, claiming Hyperlux directly competes with TQL even though Patterson’s company isn’t open for business until September.
Attorney Matthew Wiles, who is representing TQL in the action, failed to respond to FreightWaves’ request seeking comment.
Preparing to compete is not competing
Attorney Pete Patterson, a partner at Washington-based boutique litigation firm Cooper & Kirk, is representing his brother, Jacob Patterson, in TQL’s suits against him and his suit against TQL.
“We are disappointed that TQL has once again sued Jacob, this time for his ownership interest in Hyperlux Logistics. As we explained in recent court filings, Hyperlux has not begun conducting business operations, and case law establishes that preparing to compete is not equivalent to competing,” Pete Patterson told FreightWaves.
“[Jacob] Patterson owns a 50% stake in Hyperlux, though he has never earned any money from his ownership interest for the simple reason that Hyperlux has never undertaken business operations,” according to the motion opposing the temporary restraining order and injunctive relief filed by Pete Patterson.
Pete Patterson has been involved in his brother’s legal fight since May 2021, after TQL claimed that Jacob Patterson had violated his noncompete when he went to work as vice president of operations for asset-based carrier PBJ Express of Joplin, Missouri.
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 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.
“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, Jacob Patterson was hit with his lawsuit from TQL.
According to the 12-month noncompete Jacob Patterson signed, it prohibits him from working for a competing business — defined as “any person, firm, corporation, or entity that is engaged in shipping, third-party logistics, freight brokerage, truck brokerage or supply chain management services in the Continental United States” for one year after leaving TQL.
The freight brokerage’s overbroad language in the noncompete is so expansive that it would prohibit him from even driving for DoorDash, the lawsuit states.
He resigned from PBJ in August 2022 after discovering that TQL intended to file a motion seeking to add PBJ Express as a defendant in the ongoing lawsuit. TQL tried to add PBJ to Patterson’s case but failed. Instead, TQL filed a separate standalone suit against Missouri-based PBJ Express. The case was removed to federal court — the U.S. District Court for the Southern District of Ohio. PBJ has filed a motion to dismiss on personal jurisdiction grounds.
Jacob Patterson files suit against TQL
In August 2022, Patterson filed a lawsuit against TQL seeking damages and injunctive relief. His suit, filed in Clermont County, 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.” Litigation in the case against TQL remains ongoing.
As Patterson was preparing to leave his job at PBJ Express, he started looking for employment outside the transportation industry 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.
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.
Watch FW NOW as TQL files second suit against Jacob Patterson
Push to end noncompetes
Matthew Leffler, known as the Armchair Attorney, is an advocate for ending noncompetes.
“The overbroad noncompetes like TQL has in place ruins people’s lives and starve their competitors of talent,” Leffler told FreightWaves. “They don’t really care if the person stays or doesn’t, but they want to get them out of the industry.”
Leffler described companies that force employees to sign overbroad noncompetes as “lazy management.”
“Companies like TQL have found this way [noncompetes] that they think will drive retention and reduce competition, but the tides are turning,” he said.
The Federal Trade Commission has proposed a nationwide ban on noncompetes. More than 20,000 comments were posted to the rulemaking docket regarding the noncompete clause rule prior to the comment period ending on April 19. Among those was Jacob Patterson, who submitted a two-page comment to the docket about his “firsthand experience with TQL’s aggressive enforcement of noncompete agreements.”
“I write both to highlight the way these agreements often work, in practice, to the detriment of workers and the labor market at large, and to highlight features of TQL’s noncompete agreements which make them particularly damaging to the labor market and which independently should be considered unfair methods of competition regardless of whether the Commission adopts its proposed rule,” Patterson wrote.
It’s unclear when the FTC’s final rule will be released. However, Leffler said the U.S. Chamber of Commerce and other groups say they will challenge the rule, claiming FTC lacks the authority to ban noncompetes.
More than 30 million people in many industries are bound by noncompete agreements, Leffler said.
Congress is also taking aim at limiting the use of noncompete agreements.
In February, Sen. Christopher Murphy, D-Conn., introduced the Workforce Mobility Act, along with co-sponsors Sens. Todd Young, R-Ind., Tim Kaine, D-Va., and Kevin Cramer, R-ND. The bipartisan legislation seeks to limit the use of noncompete agreements that negatively impact American workers.
“Almost one in five American workers – 30 million people – are constrained by a noncompete agreement, which block workers from working for a competing employer or starting a competing business,” according to a news release about the bill.
U.S. Reps. Mike Gallagher, R-Wis., Scott Peters, D-Calif., and Anna Eshoo, D-Calif., introduced a companion bill in the House.
“Since 2020, I have worked to limit the use of noncompete agreements that slow economic innovation and productivity,” Peters said in a statement about the Workforce Mobility Act. “These agreements restrict workers, disrupt labor markets, and impede economic prosperity for Americans. By banning these agreements nationally like in California, we give the power back to the American worker and ultimately strengthen our economy’s competitiveness.”
The FTC’s proposed rule, the Workforce Mobility Act and state action may be enough to “move the needle and make these absurd noncompetes go away,” Leffler said.
“My hope is we will continue to see the trend of states banning or eliminating them. I look forward to the FTC’s final rule coming out,” he said.
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DH
Non-compete clauses do have a place but they should not be such that a person is kept from working in his/her chosen field. That is an outrageous expectation.
Frank Hammond
Dale d – where or how do you find “a reputable truck broker”? There are more brokers than drivers. 99.9% have never been in a truck or worked in a warehouse. The brokers don’t understand that someone has to touch the freight and move pallets.
Ellen Cannon
TQL’s tactics regarding former employees doesn’t surprise me one bit. As an O/O, I have pulled loads for them. They are the worst. I hope they are one of the brokerage firms the FMCSA goes after. Just crooked all the way around.
Dale d
I suggest using a reputable truck broker they give a flip about you and are usually on a fixed price for your fee
I have been in the trucking side of business for all my life
A family refrigerated carrier( which was ruined by Deragulation) and a produce broker that needed someone who spoke”truck”
MY dad was one of the first owner operators with the original REFRIGERATED TEANSPORT
You owner operators and small fleets have been given a great gift,authority to compete. I know the DOT DOESN’T GIVE A FLIP and has no idea what you go thru to exist,but please keep on trucking,America needs you
Dale d
Well freight 3pl is a scam.the government allowed them and all they do is cheat the trucker out of hard earned money while charging the shipper all they can get
Carlos Padron /
It’s so sad what’s happening in transportation business. And the way Is going What’s out owner operators and drivers? Who’s gonna take the food and everything else to the market? 2290 every year that costs owner operators and transportation companies. You don’t make no sense that IRS doesn’t know where the money’s going to. Dane enough truck parking for the drive . And Enough rest areas for truckers. A truck driver gets tired and then put over on the side of the road and dig. They don’t understand. All of this we got to blame it and our government. This is not to understand what we go through. They come up with more regulations and more rules but they really don’t seem to care and I health or a safety. The ocean in the White House the ocean in the normal office and the only thing that care is making money. Forward and sell. We’re not receiving the pay we need so don’t just think that we ascribe. We also have families and bills to pay. I hope by this. Guess out there. Each state got the regulations taxes to pay besides everything else we pay and Expensive. This is news that’s been going on forever and ever and there is thrown in to the back of the trash. In the United States and also in Canada. Also we need. More owner operators to get together and fight for our rights.
James
Just don’t like the non asset side of this industry….paper battle nothing real