- Alberta Court of Queen's Bench Upholds Restrictive Covenant in Insurance Industry
- July 3, 2014 | Author: Melissa D. Tennison
- Law Firm: Davis LLP - Calgary Office
Six-month non-competition, 18-month non-solicitation and 60-km radius found to be reasonable.
The Alberta Court of Queen’s Bench in Renfrew Insurance Ltd. v. Cortese, 2014 ABQB 157 recently granted the Plaintiff, Renfrew Insurance Ltd. (“Renfrew”), an interlocutory injunction restraining two of its former employees, Mr. Cortese and Mr. Reed, from the following:
a. Advising, managing, operating or being connected with or employed by the competing company or any other person or party engaged in business or activity that provides products or services that are similar to or competitive with Renfrew’s business within 60 km of Renfrew’s place of business of Calgary between March 14, 2014 and August 7, 2014 (approximately six months);
b. Canvassing or soliciting or accepting the business of (or procure or assist the direct canvassing or soliciting of the business of) any customer of Renfrew or prospective customer in connection with activities that are substantially the same as or are, in whole or in part, in competition with Renfrew’s business from March 14, 2014 to August 7, 2015 (approximately 18 months);
c. Soliciting or endeavouring to solicit away from Renfrew’s business, or divert or endeavour to divert away from Renfrew’s business or employ or endeavour to employ away from Renfrew any person who is now a director, partner, employee or agent of Renfrew from March 14, 2014 to August 7, 2015 (approximately 18 months); and
d. Soliciting or endeavouring to solicit away from Renfrew’s business, or divert or endeavour to divert away from Renfrew’s business or employ or endeavour to employ away from Renfrew any person who was a director, partner, employee or agent of Renfrew at any time between February 7, 2013 and February 7, 2014 through to August 7, 2015 (approximately 18 months).
[bold emphases and parenthetical comments are mine.]
The Honourable Mr. Justice G. C. Hawco had some further notes in respect of the nature of the insurance industry when he stated:
A book of business in the insurance industry is acknowledged to be a great asset. The knowledge that Cortese and Reed had about this particular niche of insurance business has come about through the efforts of both the Plaintiff and the Defendants. But the business is, as acknowledged by the Defendants, under these agreements, the Plaintiffs business. All the insurance accounts, all the lists and information, is the Plaintiff’s.
These sentiments apply in a wide variety of client-centred businesses and it is clear from the above that the Court will take these types of restrictive covenants seriously in those instances and in these types of industries.