Sunday, February 7, 2016

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.

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. 
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.

Friday, February 5, 2016

XPO Logistics Closes Seven Truck Terminals

Company extends cost-reduction effort at former Con-way Freight operation by shutting service centers in remote locations
An XPO Logistics less-than-truckload truck. PHOTO: XPO LOGISTICS INC.
Feb. 4, 2016 1:41 p.m. ET
XPO Logistics Inc. has closed seven freight terminals in the former Con-way Inc. trucking network, extending cost reductions at the business it acquired last fall.
The shutdowns in what XPO said were remote locations follow the elimination of 190 jobs last week in what the company said were back-office areas of the former Con-way Freight less-than-truckload operation, which sells delivery services on trucks for multiple customers.
“We’re continuing to migrate to a more efficient LTL organization, with better network efficiency and greater utilization of our capacity,” XPO said in a statement. “As part of our planned restructuring, we decided to close seven service centers in remote areas without exiting any markets.”
The company declined to identify the locations of the closed terminals.
XPO said shipments from the customers near the sites would be processed through other, larger facilities, making those operations more efficient. “All of our LTL customers have continuity of service during the transition,” the company said.
The $3 billion Con-way purchase completed last October capped a rapid series of acquisitions in recent years that have built XPO into a $14 billion operation. XPO Chairman and Chief Executive Bradley Jacobs has said the company is taking a break from its buying spree to focus on integrating the businesses it acquired last year, including Con-way and French trucker Norbert Dentressangle.

Shares in XPO, which reports full-year 2015 earnings on Feb. 23, were up more than 11% in trading Thursday, to $24.24.
Write to Paul Page at

Wednesday, January 13, 2016

XPO Logistics Trucking Subsidiaries Sued Over Driver Classification

Class-action lawsuit argues that drivers were misclassified as independent contractors

XPO Logistics CEO Brad Jacobs, left, talks with a company driver. Three trucking company subsidiaries of XPO were sued in California Monday for allegedly misclassifying their drivers as independent contractors. PHOTO: TONY DING/ASSOCIATED PRESSBy


The lawsuit seeking class action status, filed in Los Angeles Superior Court, argues that drivers for XPO subsidiaries Pacer Cartage Inc., Harbor Rail Transport and PDS Transportation Inc. failed to pay minimum wage, provide meal breaks and rest breaks and to reimburse business expenses, among other allegations.
In an emailed statement, XPO Chief Operating Officer Troy Cooper said: “We believe this case is without merit and plan to litigate it vigorously. We are in constant dialogue with our independent-contractor carriers and believe the vast majority of them value the significant benefits that operating independently can bring.”
XPO, a transportation services company, has grown rapidly over the past few years through acquisitions. Until last year, when XPO purchased trucking company Con-way Inc. and French transportation firm Norbert Dentressangle SA, most of the company’s subsidiaries were “asset-light,” meaning their contractors owned the equipment—for example, trucks—that they used to transport cargo.
The trucking companies that were sued Monday perform what is known as drayage trucking services, or hauling goods the short distance between seaports and nearby rail yards and warehouses, a key link in the national supply chain. Within the domestic drayage market, estimated by research firm FTR Transportation Intelligence as generating $12 billion in annual revenue, the independent owner-operator model is common.
But that model has increasingly come under legal scrutiny, in drayage as well as other sectors of the transportation industry. Alleged misclassification of workers has led to high-profile lawsuits against Uber Technologies Inc. and FedEx Corp., among others. FedEx settled a case in California last year for $228 million. Last month, a California judge ruled to expand a class-action suit brought against Uber by three drivers who claim they are employees, not contractors, and deserve benefits such as workers’ compensation.
Workers in the lawsuit filed Monday are being represented by the Los Angeles law firm Kabateck Brown Kellner LLP, which has previously brought similar claims against several drayage trucking companies, including Pacer. A $4.25 million settlement with Pacer, which they reached last May, is awaiting a judge’s approval.
Write to Erica E. Phillips at

Tuesday, December 15, 2015

New Calif. law will bring equal pay for all

Once again taking the lead where the dysfunctional U.S. Congress failed to do so, California’s legislature and Gov. Jerry Brown – with significant lobbying from the Teamsters and other unions – pushed through a strong equal pay law that brings fairness of all workers.

Jerry Brown signed the bill into law in October.
The California Fair Pay Act (CFPA), which takes effect Jan. 1, closes loopholes created since the federal Equal Pay Act passed in 1963, at least in the Golden State, home to one of every eight people in the U.S. The CFPA is among almost two dozen pro-worker laws the Democratic-run pro-labor legislature approved in its 2015 session.

The California law expands federal equal pay rights by mandating that employers pay workers, regardless of sex or gender, equally for “substantially similar” work, not just strictly equal work. Federal courts have been increasingly strict in deciding what is “equal work” the federal law covers. They’ve turned most such pay discrimination cases down.

The California law also strengthens worker protection against employer retaliation and requires firms to keep employment records, including pay records, for three years, not two.

A legal summary says California bans paying workers of the opposite sex less for "substantially similar work, when viewed as a composite of skill, effort, and responsibility." And the employer must take account of "similar working conditions," not just wages at the worksite or company branch involved.

California employers could still discriminate in pay, but only if they can show the wage differences “are due to a seniority system, merit system, a system that measures the quantity or quality of production, or a ‘bona fide factor other than sex, such as education, training, or experience,’" the law adds.

And if they cite those reasons, they must be directly job-related – and show that the factor that produces wage discrimination is “consistent with business necessity." The new law then gives workers a defense against business necessity by showing “an alternative business practice exists that would serve the same purpose without producing the wage disparity.”

The California law also bans employers from retaliating against workers who disclose their own wages, discuss other workers’ wages, ask about others’ wages or help other workers exercise their rights. But if the worker asks about wages, the
employer can refuse to answer.

If the employer is guilty of breaking the law, the worker gets back pay plus interest, an equal amount in damages, and attorney’s fees.

  • Press Associates, Inc., contributed to this report.

Sunday, December 13, 2015