Restraint of Trade Agreements can effectively prevent the drain of proprietary information and the dilution of business opportunities and trade connections. One must be mindful, that a breach or breaches of a restraint contract – is often carried out, primarily, by the employee (and often in concert with the new employer) under subterfuge, and to avoid the ex- employer finding out the true motive behind the employee’s exit, and avoid finding out what solicitation has, or is occurring, This places such applications at a very niche area of the law, and requires expertise, where bald inferences being drawn to prove a breach, often fails, when weighed up in the discretionary inquiry which the Court will perform in deciding whether to uphold or not the restraint covenant.

In the recent decision of Backsports (Pty) Ltd / OR Motlhanke and O Media Visuals (Pty) Ltd the Labour Court identified numerous pitfalls in an urgent application to restrain an employee from working for a competitor, inclusive of not specifically identifying the trade secrets which the company was trying to protect and not specifying the issues the employer was concerned about.

However, of even greater concern, was the finding by the Court that the company in dismissing employee (due to misconduct,) could not then enforce the restraint and deprive the employee of his occupation.

Whether this Judgment is a lone outlier, or becomes law followed by the higher courts, this potentially creates a predicament for any employer pursuing the enforcement of a restraint agreement out of the Labour Court, as an employee dismissed for misconduct, may then evade a Restraint. It would appear that this case may be fact specific as the employee had short service, did not have access to key clients and the Employer as a result had not made out a good case for establishing a protectable interest as the Employee. The latter of which proved fundamental to the overarching view the Court took.

At Macgregor Erasmus Attorneys, our Commercial and Labour Departments regularly pursues the enforcement of Restraints out of the High Court where an astute examination must commence by, inter alia, the evaluation of the contractual relationship between the parties and the agreement itself, the evidence available, and foreseeable pitfalls. This is where the High Court holds precedence over the equity and fairness approach of the Labour Court. Of course, some of the reasoning behind the Court’s Order in refusing to uphold the restraint, is an example of where an employee may now look to root its case when seeking to avoid being bound by his or her Restraint, and certainly, the Labour Court may well be a Forum foreseeably within which an employee may well hope to be into argue against such enforcement. Saying that, where an Employee has strong customer connections and has signed a restraint of trade which is reasonable in area and duration, where the Employer has established a protectable interest, an Employee may fall foul of both a High Court or Labour Court application.

Finally, although urgent interdicts are the normal procedure followed in enforcing restraints of trade, in some instances, where the horse has bolted and the employee joined a competitor and has started taking the previous employer’s clients, a better remedy would be to sue the Employee and the new Employer for the damages suffered.

The High and Labour Courts in Urgent Applications are highly technical exercises, fraught with procedural pitfalls. We are eminently placed to assist you with this should the need arise.