Canadian Employment Law Today

May 20, 2020

Focuses on human resources law from a business perspective, featuring news and cases from the courts, in-depth articles on legal trends and insights from top employment lawyers across Canada.

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Canadian HR Reporter, 2020 4 B.C. employee can't sell constructive dismissal argument Sales rep accused colleague of going behind her back, but colleague's own client had relationship with her client; misunderstood client protection policies BY JEFFREY R. SMITH A British Columbia employee who ac- cused a colleague of stealing her cli- ent and lost the account at the client's request has lost her claim of constructive dismissal. Janet Perron, 71, joined Vancouver-based IG Image Group in January 2012 as a sales representative. She had a roster of clients she had built up over several years in the business of sourcing and selling branded promotional products — sometimes with companies and sometimes with her own incorporated business. The roster of clients, which included BC Investment Manage- ment Corporation (BCI) and Bentall Ken- nedy Canada LP, came with her to Image Group. When Perron joined Image Group, she wanted to make sure that the client accounts she brought with her would remain hers. The president of Image Group explained that she would keep her own client list, but company policy was that when a new representative had an account with a client that an existing representative had on their list, the person with the most sales on the account would take it. This was a rare occur- rence as Image Group wasn't usually selling to accounts of a new person joining. When a new sales representative joined Image Group, the company conducted a conflict check to determine if there were any double accounts. It maintained a database of all accounts and, if a client already exist- ed, representatives couldn't enter the client's name. Perron accepted this policy and joined Image Group with commissions of 70% of net profits of transactions on her account for one year and 50% after that. Image Group supplied her with an office, computer, prod- uct sourcing resources and marketing mate- rials. Perron worked without any problems for the next four years, working mostly inde- pendently with her existing clients and de- veloping new clients. In July 2016, another Image Group sales representative, Sherry Lynne Fedorchuk, was contacted by one of her long-time clients — a public relations firm and advertising agency — to work on a project the agency was handling for one of its own clients. The project involved new branding for an entity called "QuadReal." Over the next several months, Fedorchuk made sales to her PR firm client of promo- tional projects with the QuadReal brand. She only had contact with the PR firm — none with the firm's client, QuadReal — and followed shipping orders from it. She received her commissions when the PR firm paid the invoices. Client overlap In mid-January 2017, Perron was in Image Group's warehouse and saw a packing slip for a shipment sent by Fedorchuk. She no- ticed that many of the shipping addresses mentioned Bentall Kennedy, her own cli- ent. She emailed all Image Group sales rep- resentatives asking if anyone had been in contact with Bentall Kennedy and its Quad- Real brand, to which Fedorchuk responded that she had only shipped items to Bentall through her PR firm client, who invoiced the goods. She emphasized that she had no con- tact with Bentall Kennedy. After a few more back-and-forth emails, Fedorchuk said she didn't appreciate Per- ron's "accusatory tone" and reiterated that she only dealt with her own client, the PR firm, and not the PR firm's client — which happened to be Bentall Kennedy. Perron brought her concerns to Image Group's president, who said "the accounts seem to be pretty clear cut" — Perron worked with Bentall Kennedy and its brand QuadReal while Fedorchuk worked with the PR firm who had Bentall Kennedy as its own client. The president said there can appear to be an overlap because PR agencies can work with many clients, but the accounts were tracked based on who places the business. Perron wasn't happy with the decision, as she believed any business involving Quad- Real should be part of her account, since it was a Bentall Kennedy brand. She did some research and discovered that there was a gap in Fedorchuk's sales to the PR agency from 2013 to 2016, so the agency should have been "up for grabs" as a client when it came calling on the QuadReal project and trans- ferred to her since she had more sales with Bentall Kennedy, the owner of QuadReal. Perron continued to accuse Fedorchuk of selling directly to her clients and asked that the PR firm account and "all commissions from direct invoicing to Bentall Kennedy and QuadReal be transferred to me" with Fedorchuk having no more contact with those clients. The company didn't grant Perron's re- quest and the PR firm working on QuadReal remained Fedorchuk's client. The company confirmed that its policies protected the accounts of representatives and "because QuadReal buys from [the PR firm] does not give you the right to take over the [PR firm] account" and Fedorchuk couldn't take over Perron's accounts because "her customer supplies products to them." The dispute continued for several more months and Perron grew distant from others at Image Group and distrustful of the company. Perron didn't make any sales to Quad- Real in the first six months of 2017. In the summer of 2017, Quadreal contacted Image Group about placing a purchase order of gift bags and Perron took the order. How- CASE IN POINT: CONSTRUCTIVE DISMISSAL The colleague only dealt with her own client, the PR firm, and not the PR firm's client — which happened to be the worker's client. An employee may be constructively dismissed if an employer makes a change to a fundamental aspect of the employment contract or creates a situation where it isn't reasonable to expect to continue working. However, an employee's perception of the circumstances may not necessarily reflect the reality of the situation — as one B.C. sales representative discovered when she accused a colleague of stealing her client and her employer of not following its policies. BACKGROUND

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