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 previously two years.
The most recent 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 searching for damages and injunctive relief against Patterson and Hyperlux Logistics, claiming Hyperlux directly competes with TQL though Patterson’s company isn’t open for business until September.
Attorney Matthew Wiles, who’s representing TQL within the motion, failed to answer FreightWaves’ request searching for comment.
Preparing to compete shouldn’t be 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’re disillusioned that TQL has once more 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 shouldn’t be akin 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 straightforward reason that Hyperlux has never undertaken business operations,” in line with 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 chairman of operations for asset-based carrier PBJ Express of Joplin, Missouri.
Jacob Patterson began at TQL in August 2007 and rose through the ranks to grow to be a senior logistics account executive. He’s married with five preteen children and struggled with work-life balance at TQL. He even accepted a lower-earning position to cut back his workload, becoming a senior enterprise account manager to proceed to work on the freight brokerage giant, second in size only to C.H. Robinson, headquartered in Eden Prairie, Minnesota. Nevertheless, after five months in the brand new role, “his work-life balance was substantially worse,” in line with court documents.
“My brother left TQL and didn’t wish 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 identical month, Jacob Patterson was hit together with his lawsuit from TQL.
In keeping with 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’s engaged in shipping, third-party logistics, freight brokerage, truck brokerage or supply chain management services within the Continental United States” for one 12 months after leaving TQL.
The freight brokerage’s overbroad language within the noncompete is so expansive that it could 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 searching for so as to add PBJ Express as a defendant in the continued lawsuit. TQL did add Missouri-based PBJ Express to the suit, which 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 searching for damages and injunctive relief. His suit, filed in Clermont County, alleges the case “demonstrates the extraordinary measures TQL will take to harm the profession prospects of an worker who has the temerity to go away the corporate.” Litigation within the case against TQL stays ongoing.
As Patterson was preparing to go away his job at PBJ Express, he began searching 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, in line with his bio on LinkedIn.
USI, headquartered in Valhalla, Latest York, is certainly one of the most important insurance brokerage and consulting firms on the earth, in line with its website.
Nevertheless, employment talks with Patterson ended two weeks later after Austin spoke with Chris Brown, TQL’s general counsel. In keeping with court documents, Austin was told that hiring Patterson would “hurt [USI’s] business relationship” as TQL is a 20-year client of USI.
Push to finish noncompetes
Matthew Leffler, often called 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 wish to get them out of the industry.”
Leffler described corporations that force employees to sign overbroad noncompetes as “lazy management.”
“Corporations like TQL have found this fashion [noncompetes] that they think will drive retention and reduce competition, however the tides are turning,” he said.
The Federal Trade Commission has proposed a nationwide ban on noncompetes. Greater than 20,000 comments were posted to the rulemaking docket regarding the noncompete clause rule prior to the comment period ending on April 19.
It’s unclear when the FTC’s final rule might be released. Nevertheless, Leffler said the U.S. Chamber of Commerce and other groups say they may challenge the rule, claiming FTC lacks the authority to ban noncompetes.
Greater than 30 million people in lots of industries are certain by noncompete agreements, Leffler said.
“My hope is we are going to proceed to see the trend of states banning or eliminating them. I look ahead to the FTC’s final rule coming out,” he said.
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