Ex-Steeler Bettis seeks $66M in EQT discrimination suit

For three years, NFL Hall of Famer and former Pittsburgh Steeler Jerome Bettis was the celebrity draw at the EQT-sponsored Supplier Diversity Matchmaking Event.

He sang the praises of the Downtown natural gas driller, the largest in the U.S., and told how it gave him and his brother, John Bettis, a chance to grow their business in an industry that’s tough to penetrate, especially for people of color.

“You can trust EQT,” John Bettis told other Black-owned businesses. “EQT’s commitment to diversity is real.”

The Bettis brothers’ public appearances were part of EQT’s plan to lift the profile of its diversity program, according to a lawsuit filed in U.S. District Court for the Western District of Pennsylvania earlier this week. The complaint alleges that the new EQT — the one that emerged after a shareholder revolt a year ago — racially discriminated against the brothers to the tune of $66 million in damages.

The legal challenge marks a dramatic shift in the relationship between EQT and the Bettises.

For years, Jerome and John

Bettis talked about how EQT helped them form a new minority-owned company, IntegrServ LLC, by hooking up their Bettis Brothers Sand & Gravel company with a Clearfield-based water-hauling contractor owned by Lynwood Keister and managed by Brad Kratz, both of whom are white.

IntegrServ got a yearslong contract with EQT, with Mr. Keister’s trucking company running operations and the Bettis brothers recruiting drivers and subcontractors.

At the 2019 event, Jerome Bettis appeared on video, but his brother attended in person — as did Mr. Keister, who spotted EQT’s new CEO, Toby Rice, and introduced himself.

“Lynwood Keister, we gotta talk,” Mr. Rice said, according to the lawsuit filed by IntegrServ this week.

It had been about a month since Mr. Rice led a successful shareholder revolt against EQT’s board and took the helm of the company — promising to squeeze more out of every dollar spent.

As the two men sat down, Mr. Rice complained to Mr. Keister about the “sweetheart deals” he inherited and said it stung to see IntegrServ’s logo on trucks hauling water for EQT, according to the complaint.

“He’s [expletive] stealing my money,” Mr. Rice told Mr.

Keister, the lawsuit states. “He’s getting 10%!”

The “he” was Jerome Bettis, Mr. Keister inferred.

Just six days before that, in August 2019, EQT had abruptly ended its contract with IntegrServ, citing safety violations. Mr. Keister said this hurt his trucking business. But Mr. Rice, according to the lawsuit, assured him his company would be able to continue working with EQT — just not through IntegrServ.

When John Bettis approached Mr. Rice later that day, he was told “EQT can’t have unsafe companies on the job,” the lawsuit says.

That same day, Mr. Keister got a call from EQT saying his trucking firm was “back in.”

On Thursday, EQT declined to answer specific questions about the allegations in the lawsuit, but the company said in a statement that the complaint contains “a number of false statements.”

EQT ended IntegrServ’s contract along with numerous others “as part of a program to drive efficiencies and accountability,” the statement said, but added that “Integrserv mismanaged its fulfillment of the contract, which led to numerous safety failures.”

That argument doesn’t make sense to IntegrServ, which said in the complaint that it was Mr. Keister and

Mr. Kratz who managed operations of the trucking company and that they were the ones invited back into the fold by EQT. Mr. Keister and Mr. Kratz themselves are part of the complaint, pointing out the inconsistency.

“We did everything that was asked of us and more,” Jerome Bettis said Thursday. “And we won’t stand for injustice.”

IntegrServ and Mr. Keister’s water-hauling company, KMI Trucking, declined to answer specific questions, including why the lawsuit was filed a year after things went sour between EQT and the contractor.

IntegrServ says its damages are no less than $66 million. It hasn’t gotten work with other natural gas operators because, it claims, EQT has damaged its business reputation, and it doesn’t know if it can continue as a business.

Giving small businesses an opportunity

Jerome Bettis, who retired from the NFL in 2006 and has since founded a number of companies, once said he and his brother had been keeping an eye on the natural gas industry since 2012 — waiting for the right time to jump in. It wasn’t hard to get meetings with companies using the Bettis name, John Bettis said during an industry panel in 2018.

“But it turns into an autograph signing,” he lamented during the panel discussion. “At the end of the day, when we talk about starting business, it’s a pat on the back.”

With EQT, it was a different story, he said, turning to the panel’s moderator, Lance Hyde, EQT’s diversity manager.

“We knew that we had an advocate in you at EQT,” John Bettis said.

In 2017, with EQT as a client, John and Jerome Bettis founded Bettis Brothers Sand & Gravel in Point Breeze. Almost immediately, Jerome Bettis began touting the opportunities for minorityowned businesses in the natural gas industry.

“A diversity program can give these smaller companies a road map to success,” he said during a 2017 event where he called Mr. Hyde his company’s champion. “It’s almost impossible to get into the industry without the opportunity.”

Mr. Hyde had spent years growing EQT’s diversity program and was determined to get a high-profile Black business figure on the company’s books, the lawsuit said. EQT had reached out to NBA legend Magic Johnson, but when that didn’t pan out, Mr. Hyde started trying to find a match for Mr. Bettis, according to the complaint.

The sand and gravel work was good, but if the Bettis brothers could maneuver their way into the waterhauling business, Mr. Hyde told them, they could get a lot more business from EQT. The way to do that would be to partner with an existing water trucking firm and start a new company with 51% minority ownership. Fracking for natural gas requires millions of gallons of water, first to break up the shale and then to haul away once it comes back to the surface.

Mr. Keister was reluctant at first when Mr. Hyde suggested that KMI Trucking forge a partnership with the Bettis brothers. But the marriage came with an immediate perk: a long-term contract for water-hauling services with EQT. Other successes followed.

Mr. Keister said during a panel discussion in 2018 that while drivers are chronically difficult to hire, Jerome Bettis’ profile helped bring a steady stream of new drivers to KMI, many of them minority employees.

He said the business partners had become so close he considered them brothers and advised other companies in the room that “if you have an opportunity to join forces in any way with a minority company, it’s the experience of a lifetime. Go for it!”

Mr. Hyde explained at industry events over the past several years how EQT tracked every dollar that contractors spent on products and services from minority-owned businesses.

In his bio — written when he was awarded the 2019 Minority Supplier Diversity Professional of the Year award by the National Minority Supplier Development Council — Mr. Hyde said he oversaw a huge increase in EQT’s spending on minority-owned suppliers, from $73 million in 2012 to $1.2 billion in 2018, although those figures do not appear anywhere in EQT’s public filings.

So far this year, EQT has spent $40 million with “over a hundred minority-owned businesses,” the company said Thursday, accounting for 12% of its supplier expenses.

“The fact is that EQT is demonstrably committed to service provider diversity,” EQT’s statement said.

Mr. Hyde is no longer at the company. He was cut in September 2019 — around the same time that EQT asked Mr. Keister to sign an affidavit declaring “IntegrServ failed because it got too big with too many small operators that I could not control and had little to no experience hauling water,” according to the lawsuit.

After the affidavit was signed, Mr. Keister’s trucking company, KMI, resumed working for EQT.