Georgia court determines DAT violated factoring non-compete with OTR Capital

Load board and data company DAT has been told to stop its factoring operations In a decision handed down Thursday afternoon.

Introduction to the Case

On June 10, 2025, the Superior Court of Cobb County, Georgia, granted emergency relief to OTR Capital, ordering DAT Solutions to suspend operations of its Outgo subsidiary and comply with a 2021 non-compete agreement. The court found that OTR was likely to succeed in its claims and faced “a substantial threat of irreparable harm” without immediate judicial intervention.

The dispute alleges that DAT Solutions breached non-compete and confidentiality provisions by acquiring Outgo, Inc., a factoring service provider competing directly with OTR in the transportation sector. The court’s emergency order requires DAT to cease competitive actions through Outgo and stop using a “blue checkmark” on its digital platforms.

Background of the Relationship Between OTR and DAT

Before the dispute, OTR and DAT maintained a cooperative business relationship. Founded in 2011, OTR, a Roswell, Georgia-based firm, provides factoring, banking, and payment services to the transportation industry, with factoring as a core operation.

In February 2021, the parties signed a Non-Disclosure Agreement (NDA) to explore a referral partnership. DAT agreed to protect OTR’s confidential data, acknowledging that any breach would cause “irreparable harm” not quantifiable by financial damages.

Their collaboration deepened in August 2021 with a “Referral and Revenue Sharing Agreement,” including:

• A non-compete clause prohibiting DAT from directly competing with OTR’s U.S. factoring business.
• Provisions barring DAT from using OTR’s proprietary information to divert clients to competitors.
• A confidentiality agreement extending the NDA’s terms, preventing DAT employees with access to OTR’s confidential data from developing or supporting a DAT-affiliated accounts receivable financing service.

Under this agreement, OTR became the preferred factoring provider on DAT’s “Load Board,” an online marketplace connecting trucking firms with freight clients. OTR paid DAT substantial referral fees, and the Load Board displayed a blue checkmark to indicate customer orders vetted by OTR for creditworthiness.

DAT Solutions’ Acquisition of Outgo, Inc.

On May 15, 2025, DAT acquired Outgo, Inc., a financial technology and factoring service specializing in automated invoice payments. This acquisition shifted DAT into direct competition with OTR in the factoring services market.

Post-acquisition, DAT integrated Outgo into its operations and marketed it aggressively. DAT’s website promotes Outgo as “Get smart factoring with Outgo, a DAT Product,” featuring a dedicated “Freight Factoring” section. Outgo’s CEO joined DAT’s executive team, and Outgo’s website emphasizes its status as a “DAT Product.” Industry reports confirmed DAT’s entry into factoring services, highlighting this competitive shift.

Alleged Breaches of Agreements by DAT

OTR alleges that DAT’s acquisition and actions violated their agreements in several ways:

• Direct Competition Violating Non-Compete Clause: By acquiring and operating Outgo, DAT directly competes with OTR, breaching the non-compete agreement.
• Misuse of Confidential Information: OTR claims DAT exploited confidential client lists and pricing data, accessed under prior agreements, to compete against OTR.
• Client Targeting: Post-acquisition, OTR received communications from outgo.com, suggesting DAT used insider data to solicit OTR’s clients.
• Removal of OTR References: DAT replaced OTR mentions on its platforms with Outgo, allegedly violating promotional obligations under the Referral Agreement.
• Market Confusion from Checkmark Usage: DAT’s continued use of the blue checkmark, previously tied to OTR’s credit evaluations, has confused clients about OTR’s involvement.

Consequences and Harm to OTR

The court recognized DAT’s actions as causing potential irreparable harm to OTR in several ways:

• Market Confusion: DAT’s use of the blue checkmark misleads customers into associating DAT’s services with OTR’s credit evaluations, risking damage to OTR’s reputation if services are inconsistent.
• Unfair Exploitation of Goodwill: DAT appears to capitalize on OTR’s established market reputation by retaining similar markers while offering its own services, benefiting from OTR’s brand without compensation.
• Ongoing Competitive Harm: Each day DAT competes directly with OTR results in lost client relationships, potentially causing permanent loss of current and future clients.

This harm is exacerbated as OTR paid significant referral fees to DAT, assuming no competitive conflict. Unaware of DAT’s plan to enter the factoring market, OTR inadvertently funded its own competitor.

Legal Actions and Court Orders

OTR filed a Verified Complaint for Injunctive Relief and Damages in Cobb County Superior Court, followed by a Motion for Emergency Hearing, which was granted.

On June 10, 2025, Senior Judge Adele P. Grubbs issued an emergency order after the hearing, finding:

• OTR faced a significant threat of irreparable harm without immediate relief.
• The harm to OTR outweighed any potential harm to DAT from compliance.
• OTR was substantially likely to prevail on its claims.
• The order served the public interest.

The emergency order mandates DAT to comply with the non-compete clause by:

• Refraining from competing with OTR’s U.S. factoring business through Outgo.
• Ceasing all U.S.-based factoring services via Outgo.
• Discontinuing the use of the blue checkmark for factoring indications on DAT-controlled online platforms.

This order remains in effect until a full hearing on OTR’s request for an expedited interlocutory injunction.

The post Georgia court determines DAT violated factoring non-compete with OTR Capital appeared first on FreightWaves.