Review Employment Contracts When Hiring Travel Consultants : Travel Weekly

Marc Pestronk

Q: Our agency has been overwhelmed with leisure bookings from clients we haven’t heard from since the pandemic. I would like to hire experienced agents to meet this pent-up demand, but several of those I interviewed say they may have existing employment contracts that prohibit them from working for us. Since I’m certainly afraid of being sued by a competitor, should I take the prospect’s word for what the contracts say and refuse to hire him, or should I ask him to show me the employment contracts before continuing?

A: You should review the contracts and then ask your attorney to do so. Most of the time, these contracts don’t actually prohibit the conduct that prospects think they are engaging in.

Complete bans on working for a competitor are quite unusual in travel agent employment contracts. Usually they prohibit soliciting or dealing with clients they dealt with while working for the competitor. They don’t prohibit the employee from working for you if they only deal with your agency’s clients.

Sometimes these contracts prohibit the ex-employee from using the “trade secrets” he learned during his employment. However, it is difficult to prove what a travel agency’s trade secrets are, and at least one court has ruled that customer names are not trade secrets.

In a small minority of cases, contracts prohibit travel counselors from working for any other travel agency in the same geographic area for a specified period of months or years. In a growing number of states these contracts are unenforceable, and in the rest of the states they must be reasonable in time, geography and scope so that the employee is not deprived of a means of earning life.

In another group of cases I found, the restrictions appear in an employee handbook or handbook. In most cases, these provisions cannot be enforced, as they do not contractually bind the employee.

Finally, in a very small number of cases, it turns out that the employee never signed the employment contract, so your competitor will have a lot of trouble proving that the employee agreed to be bound by it.

So the lesson here is not to take a prospect’s word for what their employment contract says. See for yourself and get your attorney’s opinion on its scope and applicability. You might be pleasantly surprised.

If it turns out that there are no meaningful restrictions in place, what can a former employee do? The general rule is that an ex-employee is free to solicit and obtain all clients. This freedom is at the heart of our free enterprise system, and the courts in every state have recognized the general rule.

Former employees may legally solicit customers by any means they choose, including phone calls, emails, texts, letters or advertisements. For work in progress, like cruises and bail tours, different rules apply, and I’ll talk about that in a future column.


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