Who owns ‘your’ client?

THE South African ITC market is
flourishing, with more agents
choosing to take the risk
and start up their own operation.
However, consultants who think
they can take clients with them may
find themselves in hot water as
consortiums are actively enforcing
restraints of trade.
Harvey World Travel recently
enforced a restraint of trade against
one of the company’s in-house travel
consultants. An agent, who had
worked for HWT since 2002, resigned
in June. When head office contacted
the client to inform them of the
consultant’s resignation and make
arrangements for her replacement,
the client informed HWT that they
were aware the agent had resigned
and that they wished to continue
working with her, terminating their
contract with HWT.
“It further transpired that the
consultant made malicious and
defamatory accusations about HWT,
particularly regarding what she had
been paid while in HWT’s employ,”
Craig Cowgill, owner of the affected
HWT branch, said in an affidavit.
“It also transpired that the
consultant set up her ITC business
from the premises of the HWT client,
where she had previously worked
as an HWT employee. She had also
contacted other HWT clients for
whom she did sporadic work.”
Although the consultant was
entitled to work for herself, or even a
competitor, the contract she signed
with HWT included a restraint of
trade. This meant that she was not
allowed to solicit or deal with HWT’s
clients for a period of 12 months,
says Gareth Cremen, attorney at
Ramsay Webber.
“There is a misguided perception
in the market that restraints of
trade are rarely enforced when travel
consultants move on. Nothing could
be further from the truth,” he says.
HWT recently obtained a court
order stating that the consultant was
interdicted and restrained for eight
months from doing business with
any of HWT’s clients. She was also
ordered to pay the costs of the legal
action.
But the consequences could have
been graver, Gareth says, as this
recent case opens up the possibility
of HWT claiming further damages
for the loss of income as a result of
losing an important client.
Craig adds that the travel industry
is almost entirely dependent on the
validity and enforceability of restraint
agreements. “The very nature of the
industry has encouraged employers
to place in-house, highly qualified,
experienced travel consultants to
expedite services for clients. This
places in-house travel consultants in
the unique position of being able to
establish, maintain and develop – on
behalf of their employers – customer
connections that appear to adhere
to them personally. These customer
connections do not belong to those
in-house travel consultants and if this
type of agreement was not enforced
it would potentially open the door
to a level of corporate hijacking by
in-house consultants that would
seriously and adversely affect the
travel industry in this country.”