Hollywood's portrayal of sports agencies presents a world that is dramatic and cut-throat, with ambitious sports agents competing for the chance to represent talented athletes. The recent Alberta Queen's Bench decision in Evans v. The Sports Corporation brought this competitive business into the courtroom when a sports agency squared off against a former employee. It also provides several important lessons of broad application to many employers.
Background
Richard Evans switched from the practice of law into sports agency in 2000. He signed an employment contract with The Sports Corporation ("TSC"). Evans was put in charge of TSC's "Czech-Slovak pipeline". That was a network of contacts through which TSC recruited Czech and Slovakian hockey players. Evans became the primary TSC contact for these affiliated Czech and Slovak recruiters.
By the spring of 2006, relations between Evans and TSC had disintegrated. As the end of his employment contract approached, Evans decided to split from TSC. He started his own sports agency. Several of the eastern European contacts, including Peter Kadlecek and Jaromir Henys, transferred their relationships from TSC to Evans' new company. But TSC asked him to leave before the end of Evans' contract.
The Key Issues
Evans sued TSC. He claimed that he was owed money due to, a) the early termination of his fixed term contract, b) the suspension of his salary during the 2004-2005 NHL lockout, and c) the outstanding bonus he was owed for signing a player, Radim Vrbata, with TSC.
TSC countered with its own claim against Evans. It alleged that Evans had violated the non-solicitation clause in his employment agreement. In it, Evans had agreed to not solicit the employees or clients of TSC after his departure.
Court Decision
Although both Evans and TSC were successful on certain points, TSC won the overall battle in respect of the damages award.
The court found that Evans was entitled to payment of his salary until the end of his fixed term contract. He was also entitled to the bonus for signing Vrbata. But his claim for salary stemming from the lockout was denied.
Importantly, TSC succeeded in their first non-solicitation claim. The court ruled that Evans was in violation of the non-solicitation clause for soliciting Kadlecek and Henys. While these contacts were not officially TSC employees, the court found that the relationship between them and TSC was tantamount to employment - TSC paid their expenses and they were key employees in the Czech-Slovak pipeline that TSC had nurtured. In addition, although Evans maintained that he did not personally solicit these contacts, the court found that Evans' decision to turn a blind eye to such actions did not absolve him from his duties under the Employment Agreement.
The court dismissed TSC's second non-solicitation claim due to a lack of evidence. Evans denied soliciting any clients and TSC presented no concrete evidence to the contrary. It relied only on circumstantial proof . It looked to the fact that a number of TSC clients had followed Evans to his new agency. And that Evans had forwarded calls from his TSC cell phone to his new business line. The court stated that although suspicious circumstances existed, they were not enough to allow it to make an inference of solicitation. The employment agreement prevented Evans from soliciting clients, but it did not prevent him from accepting clients. The clients had a right to choose their own agent.
A key part of the decision was the finding that quasi-professionals, such as sports agents have "the right and duty" to advise their clients of their departure but do NOT have the right or duty to inform their clients that they can follow their agent. The court stated that, "the clients of professionals can find out their rights from others, not from the departing professional him or herself."
Impact for Employers
This largely employer-friendly decision makes several important points. Firstly, it reinforces the principle that a clause restricting the solicitation of employees can cover persons who do not have the legal status of employees but are similar. Secondly, it limits the information that departing employees can tell clients, specifically denying the employees the right to tell clients that they can follow that employee.
Finally, in a less positive vein for employers, this case highlights the difficulty of proving that solicitation took place. One needs more than merely suspicious circumstances.
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