A Win For Employers: Greater Obligations On Some Departing Employees

SYNOPSIS

Evans v The Sports Corporation, 2013 ABCA 14 is the latest case from the Alberta Court of Appeal dealing with the obligations of departing employees to their former employers. Evans is important because it provides more guidance in the always uncertain areas of fiduciary duties and non-solicitation obligations of departing employees.

In light of recent caselaw which tends to favor the interests of departing employees, Evans serves as a counterbalance in favor of employers' interests. Evans expands the class of employees that will be considered to be fiduciaries and the scope of what conduct will be considered "solicitation". Evans also provides greater clarity on the strict body of law invalidating unreasonable restrictive covenants, including non-solicitation agreements.

FACTS

This case involved a sports agent, Evans, who was employed for 6 years by The Sports Corporation ("TSC"). His job was to assist in managing current and prospective NHL players. TSC had a strong network of prospects in Slovakia and the Czech Republic, and Evans was hired to take over management of the Czech-Slovak pipeline. As a condition of his employment, he signed a restrictive covenant containing a non-solicitation of employees and clients clause. Evans gave TSC some notice that he would be leaving and TSC told him not to bother coming into work. TSC withheld 5 days' wages owed to Evans. These actions were considered by the Court of Appeal to be a breach of contract, but not serious enough to allow Evans to claim wrongful dismissal.

Evans had arrangements with two other TSC employees, Kadlecek and Henys ("K" and "H"), that when Evans left TSC they would both leave TSC and join him. Evans did not personally solicit TSC's clients, and Evans did not directly ask K or H to actively solicit TSC's clients, but K and H were found to have solicited TSC's clients on Evans' behalf.

Many of the players, which were TSC clients, joined up with Evans' new agency after Evans left TSC.

DISCUSSION

Contractual Non-Solicitation

Respecting solicitation of clients, the agreement provided as follows:

He will not, either during the continuance of his employment under this agreement or for a period of 24 months thereafter, directly or indirectly through others, call on, solicit, divert or take away or attempts [sic] to call on, solicit, divert or take away any client of the Company which has been a client of the Company or any other company to whom Evans provided any services...