Dive Brief:

• A subsidiary of Waste Connections has filed a lawsuit against waste broker Ecube Labs, which operates under the name Haulla Services, alleging the company used a complex, “multifaceted” online scheme to steal Waste Connections’ customers.
• The lawsuit, filed March 27 in district court for the Western District of Texas, alleges Haulla illegally accessed Waste Connections’ web-based customer portal, created at least 2,500 fake customer profiles and impersonated customers through emails and phone calls in an effort to learn confidential pricing information and other terms of service details.
• Waste Connections of Texas, along with affiliates Waste Connections Lone Star and El Paso Disposal and Waste, say the issue has damaged customer relationships and hurt business, and that Haulla continues to interfere with business by adapting its strategies.

Dive Insight:

The case between Waste Connections and Haulla is unusual in the waste industry because of the methods allegedly used to steal proprietary information, according to those with knowledge of the situation. Haulla did not provide a comment prior to publication.

The lawsuit alleges that Haulla stole “confidential and proprietary customer information” and used it to encourage Waste Connections customers to “breach their contracts and sign contracts with Haulla instead.” The practice helped Haulla make money and transfer any potential contract liability onto new customers, the suit alleges.

According to the complaint, Waste Connections employees began noticing “suspicious and coordinated” activity on its customer portal in 2023. That portal holds account details such as billing information, pricing terms, frequency of pickup and other details.

Waste Connections employees noticed duplicate or new account profiles for long-established customers, or contact information that didn’t match customer names. Some of the fake profiles on the portal appeared to be used to download proprietary customer information before those profiles were deleted, it said.

In some cases, “agents” working for Haulla repeatedly guessed security questions on real customers’ profiles in order to gain access to the site. In others, they called, emailed or used Waste Connections’ customer chat to impersonate customers to request account numbers or copies of invoices, according to the lawsuit.

Waste Connections added security measures to prevent more fraudulent activity and notified customers affected by the issue, which the company said hurt its reputation. 

The lawsuit says the fraudulent activity helped bolster Haulla’s business model, which is “specifically designed to disrupt relationships between commercial customers and waste collection companies with which they contract.” 

Haulla’s website promotes itself as a cheaper alternative to established companies and says it has partnered with smaller waste haulers to help them “compete with big-name haulers who may have long established connections.” 

Haulla has acted as a broker for several Texas-based haulers such as Rio Grande Waste and Frontier Waste Solutions, who are named in the lawsuit as customers of Haulla but not as plaintiffs or defendants. Those companies did not immediately return calls seeking comment.

Haulla does business in 19 states throughout the U.S., including in Texas, California, New York, Florida and Pennsylvania, according to its website. Ecube, based in South Korea, was founded in 2011 and makes technology such as bin fill-level sensors. Haulla started in 2019.

Haulla’s website also promotes the service as a method for customers to get out of longer-term contracts with other companies. “Many businesses are stuck in long-term contracts with haulers that are overcharging them. Haulla can help,” the website said. The website offers “assistance in dealing with all formalities related to the termination of the contract with the existing waste haulage company.”

Haulla offers to pay liquidated damages owed by a customer who terminates an existing contract, but the lawsuit alleges the company’s actual contract states it “may” pay such damages and reserves the right to decline to do so or raise customer rates.

The lawsuit further alleges that Haulla actively recruits workers in the Philippines to impersonate Waste Connections customers and call real customers to persuade them to switch to Haulla services. One customer mentioned in the case was told she would save more than 20% on her service if she switched.

In another instance, Haulla allegedly impersonated El Paso Disposal by sending fake emails to customers to notify them that their accounts had been closed due to a rejected payment.

Waste Connections calls for an injunction to permanently prevent Haulla from stealing customers and accessing online portals. Haulla is expected to respond to the lawsuit in court in coming weeks.

This is not the first time that Waste Connections has sued a broker. In 2016 and 2017, Waste Connections sued Rubicon for alleged competitive issues and the two companies went back and forth over legal issues in multiple states.