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Messenger sent a clear message
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Court found courier
violated contract and trust
By Howard Levitt
Financial Post, March 01, 2006
How do companies protect their customer base from employees? Even in
the free-spirited world of bicycle messengers, companies are
vulnerable. The couriers are the face of the business and they interact
with the customers without supervision. They are often the only
representatives customers ever meet. Monitoring them is impractical and
trust absolutely necessary.
But you need more then trust. You need a contract.
Shawn Farion was a bicycle courier in downtown Calgary for West Direct
Express. The company and Farion signed a contract allowing him to
deliver parcels for other courier companies but prohibiting him from
soliciting or even doing business with West Direct's customers.
A customer, McCarthy Tetrault, became dissatisfied with West Direct's
unreliable service, but wished to still use Farion, who was always
prompt and dependable. When the law firm asked him to recommend another
company, Farion referred it to Kranq Courier, which is owned and run by
his friends.
McCarthy began using Kranq and Farion continued deliveries to the firm.
Having secured a major client for Kranq, he was paid a higher
commission than at West Direct. Everyone was happy, except West Direct.
It terminated Farion and sued him for soliciting McCarthy on behalf of
Kranq.
The Court found Farion's solicitation of McCarthy violated his contract
and awarded West Direct $7,200 in damages for its losses, representing
two months profit.
The amount could have been greater but the court concluded, since
McCarthy was unhappy with West Direct's service the firm would not have
remained a client for very long anyway.
As Alberta Queens Bench Justice Moore put it "McCarthy was totally
unhappy with the courier service provided by West Direct. It wasn't the
case of Kranq winning the job -- it was the case of West Direct losing
the job. In those circumstances, West Direct is entitled to only
limited damages from Farion."
Farion's contract with West Direct went beyond not soliciting its
customers. It also stipulated he could not do business with them on
behalf of any other company. The court found this to be enforceable.
Courts are reluctant to enforce non-competition provisions that provide
more protection -- in area, duration or scope -- than a company
legitimately requires to protect itself. It also will not enforce
non-competition covenants that effectively prevent workers from earning
a livelihood. The two restrictions in Farion's contract, not soliciting
and not dealing with West Direct's customers, were found not to be too
restrictive since he was still free to work for other courier companies.
The following three steps can protect your customers from predatory
employees or contractors:
1. Have a contract with a reasonable non-solicitation and non-deal
clause. The clause should be limited to the company's existing clients
and only those with whom the employee or independent contractor
interacts. If you overreach, seeking more protection than is
reasonable, for example, by inserting a non-competition clause,
prohibiting the employee from working in the industry altogether, you
may be left with no protection at all and the entire contract be
rendered unenforceable.
2. Obtain professional advice to review or draft your agreements to
maximize their effectiveness.
3. Enforce your agreements. If you do not enforce a contract with one
employee, a court is not likely to enforce it against another.
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