Sales representative’s insider knowledge was extensive enough that it could seriously hurt former employer if used to compete in small market: Court
The Saskatchewan Court of Queen’s Bench has upheld a contractual clause preventing a radio station sales representative from competing directly with his former employer for six months in the employer’s city.
Rob Lozinski was a senior sales representative for a Saskatoon radio station owned by Rawlco Radio from 2000 to 2009 and again from May 2011 to September 2012. During his time with Rawlco, Lozinski formed personal contacts with the company’s clients and he became very familiar with Rawlco’s marketing strategy.
Lozinski's employment contract with Rawlco contained non-competition, non-solicitation and confidentiality clauses, including a directive that if Lozinski left Rawlco, he would not be able to compete against the company within a 100-kilometre radius of the City of Saskatoon for a period of six months.
In September 2012, Lozinski left Rawlco to work as a general sales manager for another Saskatoon radio station that directly competed with Rawlco's stations. Rawlco filed for an injunction preventing Lozinski from working with the competing station, claiming he was actively soliciting and contacting Rawlco’s advertising clients.
The court found Rawlco invested a significant amount of training in its sales staff and Lozinski’s knowledge of its philosophies, strategies and client base in a “small and very competitive market” made it likely Rawlco could suffer from irreparable harm and lose its market share if Lozinski used his insider knowledge to compete against it.
The court also found the six-month period and 100-kilometre area around the city were reasonable restrictions on Lozinski in order to protect Rawlco’s business interests, as he was still free to pursue opportunities elsewhere in Saskatchewan or with other media. In Saskatoon, he was only restricted from working with the one competing radio station, and the restrictions were drafted in a clear and unambiguous way in the contract, said the court.
“To allow Lozinski to continue to use the relationships developed with Rawlco clientele and its marketing strategy to develop a similar strategy with the main competition of Rawlco in Saskatoon would result in major losses and significant damages to Rawlco, which would be impossible to calculate,” said the court. “It would be impossible to calculate which clientele left because of the actions of Lozinski and which may have left for other reasons.”
For more information see:
• Rawlco Radio Ltd. v. Lozinski, 2012 CarswellSask 786 (Sask. Q.B.).