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Home / Verdicts & Settlements / Car haulers settle over non-compete dispute

Car haulers settle over non-compete dispute

Correction: An earlier version of this report contained the following errors: The article incorrectly characterized a former JMN employee’s testimony. Contrary to our report, the witness was less certain about which document she saw the defendant William Billiter sign. The article also should have made clear that plaintiffs’ attorney Michael Izsak’s statements in the story were repeating allegations made in the suit. Last, the information box accompanying the report erroneously identified plaintiffs’ handwriting expert Lynda D. Hartwick as an accident reconstruction expert. Because of these deficiencies, we updated this post with a new version of the report. We regret the errors.

A St. Louis County car-hauling company that saw five of its employees leave to form a rival business in an alleged violation of non-compete agreements settled a lawsuit against the ex-workers for $425,000.

JMN Transportation Inc. and JMN Logistics LLC sued the five employees and their new company in 2010 after former general manager and director of operations William Billiter and director of business development Scott Naz left to work for their own company, MetroGistics, which also brokered the transportation of cars across the country.

Plaintiff’s attorney Michael Izsak of Klar, Izsak & Stenger in St. Louis said the suit alleged that before leaving JMN, the two men formed the rival company and “solicited JMN customers and employees, copied price lists and marketing materials for use in competition with JMN and removed documents” from the company, including non-compete agreements.

“JMN has spent years of effort and financial resources developing its confidential information and customer contacts, which are essential to [its] continued success,” the complaint read.

The two founders recruited three more JMN employees to the new venture, Izsak said; each was also named as a defendant in the civil complaint.

The complaint alleges that the former employees removed the signed non-compete agreements from a JMN safe. Defense attorneys Brian E. McGovern and Mario A. Gianino of McCarthy, Leonard, Kaemmerer in Town and Country did not respond to interview requests but denied the assertion in court documents.

Further, Billiter said that an undated non-compete agreement was submitted by a JMN entity Billiter had not worked for in more than three years before he left JMN, and that his signature was a forgery, according to Izsak. But a former JMN employee who left to work for Metrogistics testified at a deposition that she saw Billiter sign a non-compete agreement, though she could not state with certainty that the copy of a signed agreement possessed by JMN was the one she saw Billiter sign, or exactly when he signed it.

JMN argued that it did not matter if Billiter signed the non-compete agreement while working for a prior employer, because the JMN entity that Billiter had last worked for had been spun off from that prior employer and remained under common ownership with it.

“The spin-off was nothing more than a change in the form of doing business,” Izsak said in an interview. “That rendered the non-compete still enforceable.”

JMN also enlisted a handwriting specialist as an expert witness who said the disputed document bore Billiter’s signature. The non-compete agreements covered three years.

The spurned company initially sought a temporary restraining order to prevent the rival business from operating, as well as monetary damages, but the order was denied. Another expert witness for the plaintiffs estimated that JMN lost more than $4 million as a result of the competitive challenge.

The dispute was settled at mediation in June.

 

 

$425,000 settlement

Breach of non-compete agreements, tortious interference

Venue: St. Louis County Circuit Court

Case number/date: 10SL-CC02450/June 12, 2014

Caption: JMN Transportation Inc. and JMN Logistics LLC v. William E. Billiter, Scott A. Naz, Angela L. Billiter, MetroGistics LLC, Dustin Ruch and Jesse Chilton

Mediator: Richard Sher

Plaintiffs’ experts: Donna B. Smith, Creve Coeur (accounting/damages/economics); Lynda D. Hartwick, Lake Ozark (handwriting)

First pretrial demand: $4.6 million

First pretrial offer: $0

Plaintiffs’ attorneys: Michael H. Izsak and Nicole B. Knepper, Klar, Izsak & Stenger, St. Louis

Defendants’ attorneys: Brian E. McGovern and Mario A. Gianino, McCarthy, Leonard, Kaemmerer, Town and Country