Coquitlam clinic loses lawsuit against former employee who joined Port Moody competitor

A Coquitlam rehabilitation clinic has lost its lawsuit against a former employee who went to work for competing clinics in Port Moody and Burnaby, after a BC Supreme Court judge ruled that a non-competition clause in his employment contract was unenforceable.

In a Nov. 5 decision, Justice Judith Hoffman dismissed a lawsuit filed by Three Step Fitness Inc. against former kinesiologist Dael Song, finding the clinic’s restrictions on where he could work were overly broad and that there was insufficient evidence he had solicited former clients.

Three Step, which offers physiotherapy, Pilates, sports rehabilitation and other treatments in Coquitlam, alleged Song breached his employment agreement by joining competing clinics and encouraging patients to follow him.

Song worked at Three Step from April 2023 until Aug. 31, 2024, before taking positions at Aeris Physiotherapy in Port Moody and Able Wellness Centre in Burnaby.

His employment contract prohibited him from working for competing businesses offering Pilates, ICBC rehabilitation or personal training anywhere in Coquitlam, Port Coquitlam, Port Moody or Burnaby for 12 months after leaving.

The employment contract was a standard agreement used for all employees, with no negotiations between the parties.

However, Hoffman found the restrictions went further than necessary to protect the clinic’s business interests.

He also highlighted the imbalance of power between the clinic and Song, who was 23 years old and accepting his first professional position after graduating from Trinity Western University.

“Ms. Park (referring to Three Step founder Ella Park) took no time to explain the meaning or import of the detailed contract with Mr. Song who was accepting his first professional position after completing university,” Hoffman said.

The judge also questioned why the agreement would prevent former employees from working at gyms offering personal training but no rehabilitation or Pilates services.

Hoffman found that Three Step had a legitimate interest in protecting its clientele, but had not demonstrated why less restrictive measures, such as prohibiting employees from soliciting clients or disclosing confidential information, would be insufficient.

He also noted the geographic scope of the clause is broader than necessary, noting that Burnaby is a large municipality and clinics in some neighbourhoods would not be direct competitors of Three Step.

While Hoffman did find Three Step had a legitimate interest in protecting its clientele, he said they had not demonstrated why less restrictive measures, such as prohibiting employees from soliciting clients or disclosing confidential information, would be insufficient.

Park testified that approximately 60 percent of the clinic’s clients were Korean and that many preferred practitioners who could speak Korean.

She said the Tri-Cities Korean community was relatively small, making Korean-speaking practitioners trained by Three Step particularly attractive to competing clinics.

The court also heard that Three Step had previously granted exemptions to other employees seeking work at competing clinics in Coquitlam and Burnaby.

Hoffman ultimately concluded that the non-competition clause was unreasonable and unenforceable.

The lawsuit also centred on allegations that Song improperly recruited patients to follow him to his new workplace.

Three Step alleged that seven patients stopped receiving kinesiology treatments at the clinic following Song’s departure, including two who subsequently received treatment from him at Aeris Physiotherapy in Port Moody.

One patient, Sang Nam Park, testified that he lived in Port Moody and that Aeris was closer to his home.

Text messages presented in court showed Song informing Park that he would be leaving Three Step and moving to the Port Moody and Burnaby clinics.

Park subsequently asked whether he could continue receiving treatment from Song at the Port Moody location.

Hoffman found that Song was simply informing the patient of his departure and responding to questions, rather than actively attempting to recruit him.

“The text communication does not amount to solicitation as Mr. Song was merely advising Mr. Park as a matter of courtesy that he was no longer going to be working at Three Step,” Hoffman said.

Another patient, Hyun Sook Park, testified that she left Three Step because of dissatisfaction with changes in practitioners and difficulties involving ICBC billing.

She said she only discovered Song was working at Aeris Physiotherapy after visiting the Port Moody clinic independently.

The judge accepted her explanation and found no evidence that Song had encouraged her to leave Three Step.

As for the remaining five patients, Hoffman noted that none testified at trial and there was no evidence Song had treated them at either of his new workplaces.

“These clients may have chosen to leave Three Step for any number of reasons, and none was called as a witness to explain that decision,” Hoffman said.

Three Step also presented financial records showing that revenue from ICBC-related kinesiology assessments and rehabilitation sessions declined by approximately $3,000 per month, on average, during the six months following Song’s departure.

However, Hoffman found the clinic had failed to establish that the decline was caused by Song’s conduct.

Even if a breach of the employment agreement had been established, the judge said, the clinic had not demonstrated a connection between the alleged wrongdoing and its financial losses.

The lawsuit was dismissed in its entirety.

Song is entitled to recover his legal costs, although the parties have 30 days from the judgment to seek permission to argue for a different costs arrangement.