Every game has its rules. And when they are breached, penalties
In real life, breaking rules also has consequences, sometimes
expensive ones, as Richard Evans recently learned.
Evans was employed by The Sports Corporation, a successful
sports agency that recruits and manages prospective as well as
active NHL players. Evans was placed in charge of TSC's
"pipeline" of players from the Czech Republic and
Slovakia. TSC had two intermediaries from those countries who
sourced clients for Evans.
Evans had a written employment agreement that ultimately was not
extended. That agreement contained restrictive covenants which
prevented him, for 24 months after leaving TSC, from soliciting its
"former" and existing clients as well as its
When Evans left, he forwarded calls from his TSC cellphone
directly to his home, set up his own agency and used the same two
intermediaries to work for him, which they did for a while before
returning to work for TSC. By reason of the nature of the work,
agents form close personal connections with their clients. Indeed,
many clients followed Evans to his new firm.
TSC cried foul and sued. The trial and appellate courts in
Alberta assessed Evans a hefty financial penalty of
Evans argued that the restrictive covenant was too broad, hence
unenforceable, because it covered not only TSC's existing
clients but its former ones. The court agreed. He also argued that
the intermediaries were not actual employees of TSC and therefore
he didn't breach the clause preventing his soliciting its
employees. Here the court disagreed, concluding that they should be
treated as employees, so that Evans was in breach. It also found
that, even without the contract, he violated his fiduciary duty to
TSC because he was entrusted by TSC with the Czech and Slovak
player "pipeline" but took advantage of that relationship
to divert clients from TSC to his new firm.
Employees, especially those with written employment agreements
and/or occupying positions of trust with their employers, have to
play by the rules — and if they don't they can be
This decision by the Alberta Court of Appeal demonstrates that
the view that many employees and employers (and many lawyers) still
have as to fiduciary status is outdated. Many believe that only the
most senior executives are fiduciaries. The law has long evolved
beyond that. As result of that misapprehension, many employees
post-departure, violate their obligations, unaware of their
existence. Similarly, employers, uninformed as to the developments
in the law, permit former employees to take their clients, other
employees or business opportunities because they were unaware that
they could have sued those employees for damages or restrained the
The reality is as follows. If an employee is employed in a
position of trust and the nature of the parties' relationship
makes the employer vulnerable to that employee, the courts will
often impose fiduciary obligations, even on relatively junior
employees such as Evans.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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