Des Moines company suing 14+ former workers over noncompete agreements

At least 14 workers are being sued by an Iowa company over noncompete agreements they say are unfairly keeping them from finding other jobs.

Seneca Companies was started in 1972 by Chris Risewick, who sold petroleum equipment. Over the decades, the Des Moines-based business has diversified into selling and servicing fuel equipment, and has grown to include 10 branches throughout the country.

Seneca was family owned until this year, when the company announced it would be “partnering” with “an affiliate” of Trive Capital, a Texas private equity firm.

According to three former Seneca employees—who spoke to me on the condition of anonymity due to pending litigation with the company—that affiliate was OWL Services, a Michigan company that builds and maintains fuel infrastructure across the US.

The workers told me OWL sells and services Wayne Fueling Systems, a direct competitor of Gilbarco Veeder-Root fuel systems Seneca sold previously. The new owners at Seneca told longtime workers they’d now have to learn and become certified in Wayne’s entirely different system.

The problem? Gilbarco is huge in Des Moines and across the state, with one former technician telling me the vast majority of gas stations in the Des Moines metro had Gilbarco pumps installed. Switching to Wayne would mean not only retraining on an entirely different system, but a lot less work for the techs, many of whom are hourly wage workers.

“Some local technicians haven’t been getting their hourly,” one former tech who quit this spring told me. “I’m glad I jumped ship when I did, because I couldn’t afford (the pay cut).”

When dozens of those workers quit, finding work at companies that allowed them to continue servicing Gilbarco, Seneca started filing lawsuits, alleging the workers were violating their noncompete agreements—which one employee said prohibited similar work within a 200-mile radius.

There are now lawsuits against 14 former workers and counting, according to the attorney of some of those workers.

“You only have so many options to go elsewhere,” said one former Seneca service tech now being sued. “They kind of don’t want me employed by another company. But I don’t necessarily know how I’m a competitor anymore,” since Seneca no longer sells and services that fuel system.

“I know noncompetes are mainly for proprietary knowledge, trade secrets—anything that could cripple a company,” he added. “But, for me, I had no knowledge, no access to anything like that.”

“It’s horrible,” said another. Since the lawsuit, he’s been unable to sleep through the night. “It was tough to leave Seneca. But if they weren’t going to be Gilbarco, I couldn’t leave my knowledge on the curb.”

A third worker told me the lawsuit was a major stressor in his life.

“I cannot afford an attorney or time to (go) to court, so even if I win this ridiculous noncompete lawsuit, I still lose because of all the money I had to spend and the stress and hardship it places on me and my family,” he told me. “This whole situation is terribly wrong.”

For its part, “Seneca Companies has no comment on pending litigation regarding noncompete violations,” Jodi Solomon, Seneca’s senior vice president of marketing, wrote in response to a request for comment.

Biden tried banning noncompetes

The Biden administration did attempt to crack down on noncompete agreements earlier this year, saying such agreements cost workers jobs and lead to lower wages because of their restrictions. Around 18% of all American workers are subject to such agreements. Many are made to sign the contracts right at the beginning of a job, when it’s harder to say no.

“Noncompete clauses keep wages low, suppress new ideas, and rob the American economy of dynamism,” Federal Trade Commission (FTC) Chair Lina Khan said.

But in August, a Texas court struck down the federal ban on noncompetes. The FTC says it is “considering” appealing that decision, and says the ruling “does not prevent the FTC from addressing noncompetes through case-by-case enforcement actions.”

States across the country have a patchwork of different rules about noncompetes.

Four states—Minnesota among them—ban noncompete agreements entirely. Another nine states, including Illinois, restrict them for low-wage workers. But Iowa only restricts noncompetes for certain health care professions.