Supply chain visibility tech providers FourKites and Project44 recently resolved two long-running legal disputes—one stemming from a defamation lawsuit five years ago and the other surrounding employee poaching.
Project44 filed the older complaint, a defamation suit regarding two emails sent in 2019 by FourKites founder and CEO Mathew Elenjickal to three individuals associated with Project44.
FourKites filed the second, separate complaint against Project44 in 2022 over the hiring of two ex-FourKites employees.
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The rival Chicago-headquartered freight tech firms did not disclose the resolutions to either complaint.
“Project44 is pleased to announce the favorable resolution of our defamation lawsuit against FourKites for its false and defamatory emails sent by Elenjickal to members of Project44’s board of directors and one of its executives,” said Project44’s general counsel, Jennifer Coyne, in a statement.
The defamation case has strange origins, surrounding emails sent to Project44’s chief revenue officer Tim Betrand and two board members, Jim Baum and Kevin Dietsel by an unknown senders.
In the e-mail to Baum and Dietsel, the sender, “Ken Adams,” wrote that he was aware of “rampant accounting improprieties” at the company. Adams wrote that Project44 employees were silenced with legal threats and defamation suits and that the company was using an executive’s family member’s affiliation with organized crime in Chicago to silence people.
Another person identified as “Jason Short” emailed Betrand and told him to flee Project44 as soon as possible and find another job, warning him that he did not “want to be part of the next Ponzi scheme or the next Theranos.”
Both senders claimed to be former Project44 employees.
After Project44 requested an examination of the Gmail accounts for Adams and Short, Google provided information finding that both emails were accessed from IP addresses associated with FourKites. The emails were tied to phone numbers listed for a FourKites corporate entity and Elenjickal.
No individual was ever proven to have sent the emails.
FourKites tried to dismiss the defamation suit in 2020, arguing that the emails lacked publication and didn’t meet standards for “per se” defamation. The Cook County Circuit Court in Illinois initially agreed with the company to grant a motion to dismiss the case, but Project44 appealed the dismissal, and the appellate court forced further proceedings.
The Illinois Supreme Court took on the case in January, before upholding the appellate court ruling in March.
While FourKites argued the emails weren’t published to third parties, as they were only sent to leadership at Project44, the court rejected the argument.
“We find that a corporation has a distinct reputation from that of its management-level employees and an interest in protecting that reputation among its employees and the public at large,” the Illinois Supreme Court said in its ruling. “Therefore, defamatory statements made to corporate employees, even those with the power to act on behalf of the corporation, can harm the corporation’s business reputation among those employees.”
Communication of a defamatory statement regarding the corporation to these employees establishes the “publication” element for a defamation, the court said.
“The Illinois Supreme Court found that Mr. Elenjickal’s emails contained ‘defamatory statements made to corporate [e]mployees’ that could harm a company’s reputation. We are confident this Supreme Court decision will deter future unprofessional and destructive communications,” said Coyne.
The second complaint had already been denied by an Illinois circuit court judge in April 2022, after Project44 argued that two employees’ noncompete agreements with FourKites were too generic and overreaching that they couldn’t be enforced.
FourKites initially said the two noncompete agreements for former employees Shanavina Stokes and Kyle Hightower prevented them from working for a competitor for 12 months. But Project44 argued that a party seeking an emergency temporary restraining order must prove that it needs protection or that it would suffer irreparable harm without an order in place.
With the twin complaints now resolved, both companies can now focus on their competition within the supply chain visibility space, where they are both vying for market share.
“We are glad to put these disputes behind us,” said Elenjickal in a statement. “Our focus has always been on bringing innovation to market, transforming supply chains and driving unmatched value to our customers. That will continue to be our mission.”
FourKites chief strategy officer Sean Fallon, who also serves on the company’s board, shared a similar sentiment, saying: “These are old issues, and it’s time to move forward.”
The company says it tracks more than 3.2 million shipments daily (roughly 1.2 billion per year) across road, rail, ocean, air, parcel and last-mile delivery to more than 1,600 brands.
Comparatively, Project44’s reported surface numbers are similar, with the tech firm saying it provides visibility into more than 1 billion shipments annually for over 1,000 brands.
