XPO suing competitor YRC over theft of trade secrets

XPO Logistics entered the less-than-truckload (LTL) market with itsUS$3 billion acquisition of Con-way trucking company in October last year, but apparently the entry into the market did not go as smoothly as had been planned. On Feb. 3, XPO filed a lawsuit against one of its biggest LTL competitors, YRC Worldwide, Inc., claiming theft of trade secrets.

The complaint alleges that YRC stole company information about XPO, which had been obtained by two former XPO executives, who came to XPO with the Con-way acquisition. The two men, Paul Lorensen and Chet Richardson, were hired by YRC as vice presidents just days after XPO closed on the Con-way transaction, according to the Wall StreetJournal. XPO said in the lawsuit that Lorensen and Richardson were “highly compensated, given extensive training, and entrusted with XPO Freight’s highest level of confidential information and trade secrets.”

XPO is asking the court to order YRC to return any company information it had access to and to not employ any former XPO employees, including Lorensen and Richardson, for a full year. The lawsuit accuses YRC of encouraging the two men to “remain surreptitiously at XPO Freight for several weeks before ending their employment,” falsifying offer letters and encouraging them to disclose confidential information.

Additionally, 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.” Other employees named in the lawsuit were those in sales and operations hired by YRC that had confidentiality obligations to XPO.

The Commercial Carrier Journal reported that YRC called the allegations “meritless.”