The long-awaited trial in the overtime compensation class-action lawsuit brought by former Total Quality Logistics (TQL) employees has been pushed back because of the COVID-19 pandemic.
The bench trial was scheduled to start on July 13.
However, Bruce H. Meizlish, the lead attorney from Cincinnati, representing former TQL employees in the class-action complaint, says a hearing on recently filed motions will be held on that date.
“We are going to argue these motions on July 13, and at that time, the judge indicated he was going to establish a new trial date in the case,” Meizlish told FreightWaves.
The complaint, filed in September 2010 in U.S. District Court for the Southern District of Ohio, claims that more than 4,500 employees working at TQL’s headquarters in Cincinnati from September of 2008 to mid-April of 2016 were cheated out of millions of dollars in overtime pay while working at the second-largest freight brokerage in the U.S.
Also named in the complaint is Ken Oaks, chief executive and co-founder of Cincinnati-based TQL.
TQL states it has more than 5,000 employees in 57 offices across 26 states.
TQL recruits college graduates
Recruiters for TQL admit they seek college graduates to join their freight brokerage team as sales trainees, who are expected to make up to 100 cold calls per day. The company refers to the new trainees as Logistics Account Executive Trainees (LAET).
These trainees are expected to spend at least six months conducting sales calls for freight brokers, earning between $36,000 to $38,000, before they are even considered to make the move from salary to a commission-based pay system.
However, former TQL employees told FreightWaves they estimate that only around 5% actually make it once they transition to a commission-only pay system.
Former employees told FreightWaves they were expected to work more than 60 hours per week to meet sales goals and were expected to be available 24 hours per day, seven days a week to “increase TQL’s customer base” and were expected to respond to customer problems or questions at all times.
However, the plaintiffs claim in the class-action suit they weren’t paid for the additional hours they worked and that TQL violated the Fair Labor Standards Act (FLSA) by not paying them overtime.
“The new salespeople TQL hires are on a very short leash and they are expected to make hundreds of cold calls all of the time and it’s very hard to find new customers,” Meizlish said. “The percentage of those that actually make it onto commission with this company is very low.”
TQL posted revenues of around $3.6 billion in 2019. As of 2016, Oaks was listed as Cincinnati’s wealthiest person, with a net worth estimated at $980 million, according to Forbes.
However, this isn’t the only class-action lawsuit TQL’s legal team is fighting regarding the overtime issue and claims by former employees that the brokerage violated the FLSA.
The COVID-19 pandemic intervened once again as a case filed in July 2016 in the U.S. District Court for the Northern District of Illinois, which was slated for a jury trial on March 30, was delayed.
Meizlish said he expects the Illinois class-action case over former TQL employees’ overtime complaint to go to trial before his.
“While we were really focused on the Ohio employees in our case because it’s an Ohio-based company, TQL has expanded outside of Ohio and has set up offices in 50+ other cities around the country in recent years, so the Illinois case, which focuses on employees outside of Ohio, really has a chance to be rescheduled and likely go before ours,” he said.
While he’s been an attorney for more than 43 years, Meizlish said he’s ready to retire soon, but that he must see the TQL case, which he filed 10 years ago, through.
“I’ve been around for a long time and while it’s very challenging work, I feel like I owe it to all of these plaintiffs to see this case to the end,” Meizlish told FreightWaves.
TQL data breach class-action complaint
Several trucking companies have joined a class-action complaint against TQL for failure to implement and maintain security measures after the freight brokerage notified carriers that it had a data breach in late February, several days after the initial security breach had been discovered.
On its website, TQL states it works with a network of more than 85,000-plus carriers and moves more than 1.8 million loads of freight each year.
At the time of the data breach, TQL President Kerry Byrne stated that “hackers may have gained access to carriers’ tax ID numbers, bank account numbers and invoice information, including amounts and dates.”
Tom Millikin, corporate communications manager of TQL, told FreightWaves at the time that 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.”
TQL: Bully on the block amid COVID-19?
TQL has also come under fire for “as many as 700 employees” that were let go over a three-day period in mid-March amid the coronavirus pandemic.
Some told FreightWaves that workers were fired because the company simply didn’t have the technological bandwidth to support all of its employees working remotely.
Sources familiar with the matter allege the mass firings were “related to issues with setting up remote access” using Citrix, the company’s virtual network, and were not the result of employee “underperformance issues,” as Oaks and Tom Millikin, corporate communications manager of TQL, told FreightWaves at the time.
While Oaks declined multiple interview requests from FreightWaves to address some of the issues raised by sources, Millikin provided limited responses on some of those issues, including denying the suggestion that employee safety during the pandemic took a back seat to other priorities.
“Since the COVID-19 threat began, any TQL employee who stated his or her discomfort with working in the office because of health concerns was immediately offered the opportunity to work from home, with no strings attached,” Millikin told FreightWaves in April.
Some say they expressed interest to their managers in working remotely amid the coronavirus outbreak — which would soon become a pandemic — via Skype, which the company uses for instant messaging. One source claims that leadership requested the company’s Sales Quality Assurance department monitor employees’ Skype messages. Those sending messages critical of the company’s leadership or complaints to managers about not being able to work remotely were added to a list of those to be fired, despite their title or value to TQL, one employee told FreightWaves.
Former employees claim they were allowed to work from home in “test waves,” but the company’s virtual network, Citrix, kept crashing in the days leading up to the mass firings.
A day before the terminations began, Oaks sent out two company-wide emails addressing TQL’s “work-from-home bandwidth” progress as federal and state health agencies were 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.”
However, multiple current and former TQL employees said they do not consider the company “one of the best places to work” and told FreightWaves they fear retaliation by TQL’s “aggressive legal team” if they are named.
Ex-employees claim they did not receive severance packages and that their health benefits were canceled within hours after they were terminated. Managers also reminded them of the noncompete agreements they signed on their first day of employment with the logistics firm and that it would be enforced if they sought work with another brokerage firm within one year of leaving TQL.
Read related stories by FreightWaves’ Clarissa Hawes: