List of Assignment Essay

Submitted By jessicazhu
Words: 2525
Pages: 11

ASSIGNMENT #4 – POST EMPLOYMENT OBLIGATIONS CASE STUDY (10 MARKS) E Ltd. is a foreign exchange brokerage firm, with its head office in Edmonton, Alberta, and offices in a number of other locations in Canada. The Defendant employees worked in the Calgary office. E Ltd. provides corporate clients with services with respect to their foreign currency needs. Through its traders, E Ltd. buys and sells international currencies for it clients. Its traders are involved in securing new clients and dealing with the foreign currency needs of ongoing clients. The Calgary office had an estimated 550 ongoing clients and generated more than $2 million in annual sales. The three Defendant employees together accounted for about two-thirds of the production of that office. O and K were employed by E Ltd. as a foreign exchange traders. They earned $150,000 and $106,000 a year respectively based on commissions. The employer is relying on a non-competition clause and non-solicitation clause which they signed while employed by E Ltd. They did not receive anything for this. Both resigned on March 15, 2005 after they refused to sign a second employment contract that contained a more onerous non-solicitation and non-competition clause. Restrictive covenants M is 29 years old. He was employed by E Ltd. as a foreign exchange trader from December 1, 2003 until he was terminated on March 4, 2005. His 2004 income from E Ltd. was $62,000. The employment contract which he signed when hired contained the non-solicitation and non-competition clauses. He was fired by his employer after he refused to sign an affidavit stating that he was not in contact with another ex-employee of E Ltd. Each of these men came to E Ltd. with some prior knowledge and training regarding international finance and sales, but none had previously worked as currency brokers. They all received training from E Ltd. in marketing and servicing clients. Each of them had a confidential client list and developed intimate working relationships with his clients while at E Ltd. E Ltd.’s business is conducted over the telephone. The clients' primary contact is with the traders who manage their accounts on an ongoing basis. In this way, E Ltd. traders act as the "voice" or personification of E Ltd. to its clients. This was the case for each of the Defendant employees. Almost immediately following their departure from E Ltd., O, K, and M became involved with Buttress partnership which and conducted business in competition with E Ltd. It is not alleged that the Defendant employees took client lists or other confidential business documents with them. The Defendant employees have represented to E Ltd. and to the Court that they are not soliciting clients of E Ltd.; they have compiled a "Do Not Call" list of all clients that they remember servicing while employed at E Ltd. and this list has been circulated to all their employees or associates with instructions that no calls are to be made to persons on the list. If a cold call is made to a E Ltd. client unknowingly, they are added to the list and no information regarding Buttress partnership is sent to them. Despite these measures, three former E Ltd. clients have retained Buttress. The Defendants advise that these clients were not solicited, but contacted Axiom directly. The employees signed the following versions of non-competition and non-solicitation clauses: The non-solicitation clause provides as follows: 2. That for a period of twelve (12) months from the date of termination of the Employee's employment with E Ltd. for whatever reason, he/she will not, for any reason directly or indirectly as principal, agent, owner, partner, employee, consultant, advisor, shareholder, director or officer or otherwise howsoever, own, operate, be engaged in or connected with or interested in, the operation of or in any way guarantee the debts or obligations of, or have any financial interest in or advance, lend money to,…