• ITVI.USA
    12,499.850
    28.070
    0.2%
  • OTRI.USA
    16.210
    0.080
    0.5%
  • OTVI.USA
    12,486.680
    25.950
    0.2%
  • TLT.USA
    2.640
    0.000
    0%
  • TSTOPVRPM.ATLPHL
    2.630
    0.110
    4.4%
  • TSTOPVRPM.CHIATL
    1.910
    0.050
    2.7%
  • TSTOPVRPM.DALLAX
    1.250
    -0.060
    -4.6%
  • TSTOPVRPM.LAXDAL
    2.390
    0.130
    5.8%
  • TSTOPVRPM.PHLCHI
    1.330
    0.070
    5.6%
  • TSTOPVRPM.LAXSEA
    2.750
    0.020
    0.7%
  • WAIT.USA
    103.000
    -17.000
    -14.2%
  • ITVI.USA
    12,499.850
    28.070
    0.2%
  • OTRI.USA
    16.210
    0.080
    0.5%
  • OTVI.USA
    12,486.680
    25.950
    0.2%
  • TLT.USA
    2.640
    0.000
    0%
  • TSTOPVRPM.ATLPHL
    2.630
    0.110
    4.4%
  • TSTOPVRPM.CHIATL
    1.910
    0.050
    2.7%
  • TSTOPVRPM.DALLAX
    1.250
    -0.060
    -4.6%
  • TSTOPVRPM.LAXDAL
    2.390
    0.130
    5.8%
  • TSTOPVRPM.PHLCHI
    1.330
    0.070
    5.6%
  • TSTOPVRPM.LAXSEA
    2.750
    0.020
    0.7%
  • WAIT.USA
    103.000
    -17.000
    -14.2%
Legal issuesLogisticsNewsTrucking

TQL faces lawsuit over data breach

Multiple employees of brokerage firm fired less than a month after a hacking incident; TQL cites performance issues

A trucking company has filed a lawsuit against Total Quality Logistics (TQL) over its recent data breach, alleging the company was negligent after hackers attacked its computer systems in February.

Owner Charles Newman, whose trucking company is not named in the filing, claims TQL, headquartered in Cincinnati, failed to “implement and maintain reasonable security measures over personally identifiable information,” according to the complaint filed in U.S. District Court for the Southern District of Ohio.

Newman, of Milwaukee County, Wisconsin, seeks certification of the complaint as a class action, which would allow other motor carriers to join the suit against TQL because of the data breach. He is represented by The Kerger Law Firm in Toledo, Ohio.

TQL is one of the largest privately held freight brokerage firms in the country, reporting annual revenue of around $3.6 billion.

“We don’t comment on pending legal matters,” Tom Millikin, corporate communications manager of TQL, told FreightWaves on Saturday.

According to TQL’s website, it has 57 sales offices, works with a network of more than 85,000-plus carriers and moves more than 1.8 million loads of freight each year.

TQL notified carriers early on Feb. 27, four days after the company stated it first discovered that external hackers had breached its IT systems and may have gained access to customers’ business information.

Newman claims in the suit that his was among the carriers that received an email from TQL President Kerry Byrne, stating that “hackers may have gained access to carriers’ tax ID numbers, bank account numbers and invoice information, including amounts and dates.”

At the time of the data breach, Millikin told FreightWaves he wasn’t sure of the exact number of carriers who may have been affected by the security breach in its IT systems but was working with law enforcement and a cybersecurity firm to identify which carriers and customers may be impacted.”

TQL recommended carriers take extra security measures and contact their bank or financial institution and notify them that their information — specifically bank account, routing and tax ID numbers — may have been compromised, and suggested carriers place a fraud alert on their credit files.

“We are still gathering details, but it appears it was initially an information/data phishing attempt,” according to Byrne’s email to carriers. “Our IT security teams identified the issue quickly and countered immediately to secure all online information.”

Shakeup at TQL

Sources inside TQL told FreightWaves they watched as coworkers were called into TQL offices in several cities earlier this week and terminated, with performance issues given as the reason.

TQL has not revealed exactly how many employees were fired.

On the company’s website Saturday, TQL lists 125 open positions at its various offices

“This week we informed some employees they were being separated from the company due to underperformance,” Millikin told FreightWaves on Saturday. “No other internal or external factors played a part in these decisions.”

One former TQL employee claims she was hitting her sales goals and making her allotted number of daily “cold calls” when she was fired on Wednesday.

“I was caught completely off guard,” the source, who didn’t want to be named, told FreightWaves. “When I asked why, I was told the company needed to ‘trim headcount’ to make sure there was enough server capacity for remote employees because our system kept crashing.”

A day prior to the terminations at various offices, Ken Oaks, chief executive and founder of TQL, sent out two companywide emails addressing its “work-from-home bandwidth” progress as federal and state health agencies are urging companies to allow employees to work remotely in an effort to curb the spread of the highly contagious coronavirus.

In the emails, obtained by FreightWaves, Oaks states, “Currently, we have 2,200 employees working from home, testing systems. IT will be adding more servers to our network to improve the speed and quality for our work-from-home users. Until that process is complete later this week, we’re holding on sending any additional employees home for testing or work-from-home moves.”

One source claims she did not receive a severance package and that her health benefits were canceled within hours after she was terminated from TQL. On her way out, the source, who did not want to be identified, said she was reminded of the noncompete agreement she signed on her first day of employment with TQL, and that it would be enforced if she sought work with another brokerage firm.

“Unfortunately for these former employees, there is a good chance the noncompete is enforceable,” Cassandra Gaines of the Gaines Law Group LLC in Scottsdale, Arizona, told FreightWaves.

“Each state has different laws that apply and the circumstances surrounding the execution of the noncompete could change my analysis,” said Gaines, a transportation attorney. “But often with standard noncompete terms, how the employee departed the company is irrelevant.”

Gaines said she has warned employees about these types of situations.

“Sometimes employees are fired without severance and caught off guard and the noncompete still applies,” she said.

According to a recent Politico article, approximately “18 percent of households already reported someone being laid off or having hours reduced because of the coronavirus outbreak.” In Ohio alone, where TQL’s headquarters are located, 45,000 people filed for unemployment in the past week, the article stated.

With jobs already scarce, the former TQL employee said she’s afraid she won’t be able to find a job in any field right now as mass layoffs are affecting nearly every business sector in the country.

“I am just sad that I won’t be able to use my skills and experience because of something I signed on the first day of work, along with my other new-hire paperwork,” the source said. 

A former TQL employee said he was fired Wednesday and admitted he hadn’t met his sales goal, but claims it was because he lost a highly valued account after TQL’s data breach in February.

“It was nothing I did or could control, but, yes, when you look at my numbers on paper, they weren’t what they once were before the data breach,” the source said.

Sources remaining at TQL told FreightWaves they are concerned about their future with the company after some employees were fired without notice.

In an email dated Thursday, a day after some employees were fired, Oaks sent out another companywide email reminding employees that “our industry is crucial to the nation right now.”

In the email, obtained by FreightWaves, he wrote, “When we look back on this experience, I know we will feel the pride of working together to overcome the challenges that faced us head on, through incredible hard/smart work. Let’s continue crushing it out there.”

If you are a current or former TQL employee with a story to share, please send an email here. Your name will not be used in any follow-up article without your permission.

Read more articles by FreightWaves’ Clarissa Hawes

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Clarissa Hawes

Clarissa has covered all aspects of the trucking industry for 14 years. She is an award-winning journalist known for her investigative and business reporting. Before joining FreightWaves, she wrote for Land Line Magazine and Trucks.com. Clarissa lives in the Kansas City area with her family. If you have a news tip or story idea, send her an email to chawes@freightwaves.com.

17 Comments

  1. I absolutely agree with all the negativity about TQL. I have refused to do business with them for years yet, they still call even after requesting that our agreement be terminated. They even tried to convince me sign a co-broker agreement for the brokerage side of my operation! I’ve worked hard to build those relationships with my customers and carriers and i’ll be damned if I’m gonna let them destroy it. If there is a class action law suit you can bet I’m in! Festering pustule, cancer, bad apple? Those are understatements!
    My comments would absolutely be edited by the monitors of this forum, guaranteed!

  2. Non compete.
    My position about non-compete never changes, it is taught in ethics class at any university in the world:
    My fault for being fired -> enforce non-compete.
    Fired without reason -> non-compete don’t apply.
    If that is not written in the contract when hired, I won’t sign a contract constricting my life.

  3. How about you do some real reporting, this is all slander and you should be sued. It a time of unknown, TQL employees 5000 plus individuals and helps keeps America moving. They invest in their employees instead of selling out to private equity firms. This reporting is irresposible and you should be ashamed of yourself.

    What does freightwaves to our environmnent? How are you making this situation better? Next time, acutally due your due diligence instead of hopping on the back of a blogger. TQL is an awesome company and a pillar of what America is all about. In a time where Amecica needs creditable/hopeful reporting, you are taking advantage of a bad situation. Be proud of that.

  4. Do some research, this is the second lawsuit in two years by Newman for the exact same accusation . Correct your reporting, and do some more research before publishing. it just takes a couple google searches.

  5. The trucking industry as a whole will benefit from this kind of reporting, and I hope it continues. Thank you for shining light into a company that has mistreated employees since its inception.

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