XPO Logistics Sues Trucker YRC, Charging Rival ‘Poached’ Executives, Trade Secrets

Discussion in 'XPO Logistics' started by Freightmaster1, Feb 5, 2016.

  1. Freightmaster1

    Freightmaster1 Well-Known Member

    XPO Logistics Sues Trucker YRC, Charging Rival ‘Poached’ Executives, Trade Secrets
    Logistics company says trucking giant sought employees and confidential information after XPO acquired Con-way Inc.
    XPO Logistics entered the highly-fragmented market for less-than-truckload business last fall with its acquisition of Con-way. . Photo: XPO Logistics Inc.
    Loretta Chao
    Feb. 5, 2016 4:26 p.m. ET
    XPO Logistics Inc. is suing competitor YRC Worldwide Inc. over the hiring of several former employees, alleging that the trucking company conspired to steal customer and pricing secrets by poaching its executives.

    The lawsuit, filed Feb. 3, pits two of the largest trucking companies in the U.S. against each other over the trade secrets that are at the heart of the highly competitive freight shipping market.

    The complaint grew out of XPO’s takeover last October of Con-way Inc. and its Con-way Freight unit that is the second-largest in the country offering less-than-truckload service, in which shipments from multiple customers are combined on trucks. YRC Freight is No. 3 in that market.

    In its complaint, XPO asks the court to order YRC to return any trade secrets and company information it holds and to stop employing for a year former XPO employees, including two top executives who had come to XPO through the company’s acquisition of Con-way.

    XPO alleges in the complaint that two of the employees, longtime senior executives at Con-way Freight, had “informally” accepted job offers with the competitor weeks before their departures but delayed their resignations. XPO said it believes that was so the executives could get more “confidential information and trade secrets, including but not limited to its most valuable competitive strategies” as XPO prepared to restructure the Con-way operation.

    A YRC Worldwide spokesman said in an email that the company declined to comment on the complaint.

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    The lawsuit comes after XPO, which under Chief Executive Bradley Jacobs has used a rapid series of recent acquisitions to become a multibillion-dollar freight brokerage and transportation services provider, moved directly into the trucking market last year with its $3 billion purchase of Con-way.

    Last month, YRC said it had hired former Con-way executives Paul Lorensen and Chet Richardson as vice presidents. XPO said the executives had moved to YRC last November, days after the XPO acquisition had closed.

    XPO said in the lawsuit that Messrs. Lorensen and Richardson were “highly compensated, given extensive training, and entrusted with XPO Freight’s highest level of Confidential Information and Trade Secret.” It said the executives were part of a steering committee that worked closely with McKinsey & Co. on a strategic project to transform the company, and helped develop potential new segmented service offerings aimed specifically at competing with YRC.

    Reached by phone, Mr. Lorensen said he would have no comment on the complaint. Mr. Richardson did not respond to emails and other messages seeking comment on the allegations in the XPO complaint, and a YRC spokesman said he and Mr. Richardson wouldn’t comment on pending legislation.

    The lawsuit accuses YRC of encouraging the executives to “remain surreptitiously at XPO Freight for several weeks before ending their employment,” of falsifying offer letters and of encouraging the executives to disclose the confidential information.

    In addition, XPO said, “YRC is offering each poached sales employee a special commission or bonus for each XPO Freight customer they bring with them to YRC.”

    The other employees named in the lawsuit were sales and operations personnel hired by YRC that XPO said had “confidentiality obligations.”

    Since acquiring Con-way, XPO made a series of cost reductions in its new division, including cutting 190 administrative, back-office and management jobs, and closing seven freight terminals.

    Write to Loretta Chao at loretta.chao@wsj.com

    wongway likes this.
  2. icuicp

    icuicp Well-Known Member

    I will say this about YRCW : At least they are trying something ( as far as salespeople and new accounts ) *I post this with a little sarcasm*

    Honestly , I haven't seen any brand new business in over a decade that was brought in by our local account executives. The only new business has been national accounts , and only national accounts for over a decade.
    Never see the account executives in the streets or at the customers. I wonder how they spend their time?

    Anyway , back to the topic - all YRCW had to do is wait a little while and make it a little less obvious , jeez....
    trucknfool, Blue-done-4-U and Cnwy21 like this.
  3. WHO KNOWS105


    XPO is suing Chet R and Paul L. They had a 1 year non-compete contract, but it had just expired and got overlooked, was supposed to be automatically re-signed every year, got overlooked or something. All I know is they are suing them for breach of contract. I posted this in XPO Financial Outlook Thread on Jan 28th, looks like they followed through with their threat
    Blue-done-4-U likes this.
  4. Cnwy21

    Cnwy21 New Member

    I had to log on just to like this comment. Our sales guy is exactly the same, never see him out on the road. Nice to know its not just our one, although that's not a good sign.
    Songremainsthesame likes this.
  5. Rastus

    Rastus ..“We caught em”..

    Trade secrets and poaching talent. :hysterical:
  6. ramerjamer

    ramerjamer Member

    Paul's son is an AE in NBM. I wonder if they'll be trading secrets?
    trucknfool likes this.
  7. trucknfool

    trucknfool Well-Known Member

    Couldn't happen to a nicer bunch!!!!!!
  8. had enough

    had enough pErSoN oF iNtErEsT

    jacobs soap opera, undoubtely there's a loophole or just plain expired contract for these guys to go to YRC. grasping at straws, just upset he's left holding the bag. hey jacobs, you're playing with the big boys now.
  9. wongway

    wongway -15% Pay , Never forget

    yrcw can't move the freight they have now ,so no need for trade secrets !!!!
    freightman68 likes this.
  10. Freightmaster1

    Freightmaster1 Well-Known Member

  11. ScotchNeat

    ScotchNeat Well-Known Member

  12. ScotchNeat

    ScotchNeat Well-Known Member

    I wonder if XPO retained the law firm of Keller & Keller, cause they mean business!
    Songremainsthesame likes this.
  13. catchTHErabbit

    catchTHErabbit PRAISE THE LORD!and pass the ammunition PLEASE!!!!

    well i see this as karma seeing c.h robinson is sue'n xpo for the same! from back in 2011 not sure if it is settled yet
  14. Blue-done-4-U

    Blue-done-4-U Active Member

    WOW!! Thank You ScotchNeat for the full-text posting.
    The classic quote by Sir Walter Scott says it best
    " Oh, what a tangled web we weave,
    when first we practise to deceive! "
    Deception has been in place for many years and
    Karma stinks when it comes back to collect!!
  15. 616jimmy

    616jimmy Well-Known Member

    Right, just because they file a suit doesn't mean they will pevail
    Anyone can file a lawsuite, prevailing in it is another thing altogether, these people have a right to work for someone else,reading the whole story it sounds like X.P.O. droped the ball on this and forgot to get some important papers signed!
  16. Duffman80

    Duffman80 New Member

    Quite possibly the most ignorant statement- "Local accounts not bringing on any new business." Local accounts are the only profitable accounts in this industry. We need national accounts due to their volume to pay for all the overhead. Any profit beyond that is due to local accounts that pay higher rates and don't have every accessorial fee waived.

    Decisions are not made by the warehouse personnel any more. They are made in offsite office buildings and in the front office. That's why you don't see salespeople in the back of the building with the drivers much anymore.

    prior to about 6 years ago, local account executives at con-way were only responsible for one thing- outbound revenue. That was irregardless of who was paying for it or making the decisions. That led to account executives hanging out and buying pizzas for big national accounts with a lot of outbound freight with no decision making ability. Then down the road the corporate says "no more con-way" for whatever reason and the freight stops. Account executive goes in "hey where is the business?" Customer says "sorry, corporate says we can t use you any longer". Salesperson says "what about the pizza lunches and games I took you to and everything I helped with smoothing out issues?" Customer says "thanks for that, but I can't use you. Corporate says".
    All those pointless sales calls on people not even calling the shots. Now local account executives are responsive for revenue that hits the customer's negotiated pricing agreement. Outbound prepaid, inbound collect and third party shipments billed to the account. I'm sure there are some crappy salespeople out there. There are a lot of good ones too. If they are good they are sitting In front of the people calling the shots not just bs'ing on the dock or at the terminal listening to themselves talk. Salespeople know how that drivers are doing their jobs even though they may not see them everyday. Salespeople have goals and need to meet them to stay employed. So trust they are doing what they need to be doing as well.
    On another note, we could be blowing the doors off this place if we could reduce damage. We churn about 30% of our business every year due to damage, service, or lower price to the competition. We cannot prevent low ever competitive pricing but we can reduce damage and improve service.
    My question to you is, is it easier to grow by 5% every year by selling 35% new business or by reducing the churn by improving damage and service?
    Please respond intelligently instead of throwing out a blanketo statement with no facts to back it up.
    freightfreak and Northern Flash like this.
  17. hoagiedriver

    hoagiedriver Member

    if them suits are helping yrc the same way they helped us oh boy.one of them will call him mr. tough guy after the way he treated us i can only hope them union boys take a dump down his neck.
    bigtruk_us and trucknfool like this.
  18. Rastus

    Rastus ..“We caught em”..

    CCX used to have the drivers on their side selling and promoting freight.
    Couple of years ago the system was backed up due to weather and dispatch quit taking pickups at a certain time. I was at a good regular customer begging me to pickup a must go skid. Called the dispatcher to add it to my handheld and he said no. These people are computer operators and bean counters, they know nothing about business
    Back in the day I'd have just picked up and it would have road. Who'd stick their neck out for these people?
    trucknfool and WHO KNOWS105 like this.
  19. hoagiedriver

    hoagiedriver Member

    its the same all over these dispatchers don't know what we did to be so liked by our customer's. your spot on
    trucknfool likes this.
  20. WHO KNOWS105


    Don't pick up any freight going to KANSAS CITY! that is what I remember about that year

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