As an employer, a Restraint of Trade Agreement is a key element in protecting your organisation. Care should however be exercised in composing these restraints to avoid these being rendered ineffective
either because they are too narrow to provide any useful protection or so wide as be unenforceable. Some guiding principles gained from two recent cases:
- a restraint of trade can only be enforced if it protects some proprietary interest. This interest may take the form of trade secrets, confidential information, goodwill or trade connections.
- the Courts will not enforce agreements that are contrary to public policy
- if the reasons for enforcing the restraint was to discourage or eliminate competition, the restraint would be unenforceable.
Employers should take care that there is something unique and worthy of protection and that this is properly defined in the restraint agreement.
Should you wish to discuss your restraint of trade arrangements, contact Wayne on wayne@twigg.co.za who will either assist you personally, or refer you to an appropriate legal advisor.
Advtech Resourcing (Pty) Ltd t/a The Communicate Personnel Group vs Khan & Another [2007] 4 ALL SA 1368 (C)
Hirt & Carter (Pty) Ltd vs Mansfield & Another [2007] 4 ALL SA 1423 (D)
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