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[2020] ZAWCHC 11
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Truworths Limited v de Bruyn and Another (2174/2020) [2020] ZAWCHC 11; (2020) 41 ILJ 1617 (WCC) (21 February 2020)
Republic of South Africa
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
Case
No. 2174/2020
Before:
The Hon. Mr Justice Binns-Ward
Date
of hearing: 20 February 2020
Date
of judgment: 24 February 2020
In
the matter between:
TRUWORTHS
LIMITED
Applicant
and
DANIELLE
DE
BRUYN
First
Respondent
ADIDAS (SOUTH AFRICA) (PTY)
LTD
Second
Respondent
JUDGMENT
BINNS-WARD J
[1]
The applicant, Truworths Limited, is
described in the founding affidavit as ‘a leading retailer of
fashion, clothing, footwear,
homeware and related merchandise in the
ladies’ men’s and children’s markets’.
It has 728 stores
throughout South Africa. The company has a
range of ‘specialised retail formats and brands’.
The deponent
to the founding affidavit averred that ‘[t]hose
relevant to this application are not only “
Hey
Betty
”, but also “
OBR
Sport
”, “
Outback
Red
”, “
TRNY
”,
“
TRS
”,
[and] “
Hemisphere Sport
”’.
The ‘
Hey Betty
’
brand of women’s clothing is proprietary to Truworths. It
is what I would call an ‘inhouse brand’.
Some of
the other brands just mentioned, such as ‘
Outback
Red
’ and ‘
Hemisphere
’,
would be recognisable to retail trade cognoscenti as overseas
brands. The deponent pointed out that ‘Truworths
also
sells “
Adidas
”,
“
Reebo
k”
and “
Puma
”
branded footwear’ and proceeded to explain that ‘[t]he
additional brands are relevant because their target market
and
offering compete with Adidas, and because [Danielle] De Bruyn had
access to being exposed to Truworths styles and purchasing
for them.’
[2]
Danielle de Bruyn is the first respondent.
Having then recently graduated from the Durban University of
Technology with a
national diploma in fashion, she was engaged by
Truworths as a trainee buyer in January 2014. She underwent a
two-year period
of inhouse training before being promoted by the
company to the positions of ‘designate buyer’, and
thereafter, buyer.
She terminated her employment with Truworths
with effect from the end of January 2020, at the conclusion of the
four-month notice
period that she had been obliged to serve out in
terms of her contract of employment. Ms de Bruyn’s last
working day
was 17 January, after which she proceeded on leave.
She thereafter, with effect from 17 February 2020, took up a
position as a buyer with adidas (South Africa) (Pty) Ltd, which is
the local manifestation of the well-known multinational business
of
the German company, Adidas AG. Adidas (South Africa) (Pty) Ltd
is the second respondent. For convenience, I shall
refer to the
second respondent simply as ‘adidas’.
[3]
Truworths seeks in these proceedings to
obtain an order enforcing a six-month restraint of trade agreement
that was concluded between
itself and Ms de Bruyn as part and
parcel of the latter’s terms of employment. The company
contends that Ms de Bruyn’s
employment by adidas has
put her in breach of the restraint. Initially, only an interim
interdict was sought as a matter
of urgency. But as the issues
had been fully ventilated on the papers by the time the matter came
to a hearing on 20 February
2020, the application was prosecuted
on the basis that a final interdict should be granted. Notice
of opposition was given
by Webber Wentzel attorneys on behalf of both
of the respondents. Their answer to the founding papers was
given in an affidavit
by adidas’s Senior Director: Direct to
Consumer Adidas Emerging Markets. Ms de Bruyn deposed
to a confirmatory
affidavit, verifying, insofar as she was able, the
averments made in the principal answering affidavit. It goes
almost without
saying that because final relief is sought the
evidence falls to be assessed on the now well entrenched principles
set forth in
Plascon-Evans Paints Ltd v
Van Riebeeck Paints (Pty) Ltd
[1984]
ZASCA 51
(21 May
1984); 1984 (3) SA 623
(A) at 634E-635C.
[4]
The respondents took the preliminary point
that the application had been unduly delayed as Truworths’
representatives had
been aware from December 2019 that Ms de Bruyn
had been offered employment by adidas. It must be said,
however, that the
position at that stage had not been altogether
clear. It would appear that adidas, having accessed her profile
on the business
networking site LinkedIn, had headhunted Ms de
Bruyn towards the end of 2019. Ms de Bruyn had made no secret
of the
offer of employment that she had received from adidas and had
been advised by the relevant personnel at Truworths that she would
be
in breach of the restraint of trade agreement should she take it up
before the period of the restraint had elapsed. It
would seem
that at that stage Ms de Bruyn’s first preference was in fact
to emigrate to Portugal, where her partner had reportedly
been
offered an attractive business opportunity. Emigrating to
Portugal turned out to be more complicated than expected,
however,
and for that reason she accepted the offer to join adidas.
Having learned of Ms de Bruyn’s decision to commence
employment
with adidas, Truworths, through its attorneys, addressed letters of
demand to both of the respondents. They sought
undertakings
that the terms of the restraint would be honoured; failing which, so
they advised, legal proceedings would be instituted.
The
respondents requested, and were afforded, extra time to react to the
demand. It was only when the demand was refused
that the
current proceedings were launched.
[5]
I do not consider in the circumstances that
Truworths can reasonably be accused of failing to act with
appropriate expedition, and
it is clear, having regard to the
duration and intended purpose of the restraint, that it would not be
able in proceedings brought
and conducted in the ordinary course to
obtain the redress to which it contends it is entitled. It was
therefore appropriate
for the application to be entertained as one of
urgency and for the necessary exemptions from the forms and processes
in terms
of the rules of court to be granted.
[6]
When Ms de Bruyn was engaged as a trainee
buyer, her contract of employment provided, amongst other matters, as
follows:
Restraint
During your training you will be exposed to highly
confidential and commercially sensitive information regarding
Truworths.
You will also be trained to utilise systems and
procedures which have been developed at Truworths at considerable
cost and which
are key to our Company maintaining its competitive
advantage. We therefore require all trainees to sign a
Restraint –
the full details of which are attached.
The material term, at least for present purposes, in the accompanying
‘restraint agreement’ that was signed by Ms de
Bruyn on
the same date as her contract of engagement was framed in these
terms:
(a)
Should your employment
with Truworths be terminated, you cannot work for any of our
competitors in South Africa, either directly
or indirectly, or for
any of the suppliers of our competitors for seven months after you
have left Truworths, i.e. seven months
after the date of termination
of your employment.
The engagement contract was amended on two occasions during Ms de
Bruyn’s period in training. The first of these amendments
was effected in terms of an addendum agreement concluded on
18 February 2015 and the second in terms of a further addendum,
expressly related to the first addendum, that was executed a few days
later. The second addendum afforded Ms de Bruyn
the option
of being subject to giving three months’ notice of intention to
terminate her employment with an attendant seven-month
restraint of
trade, alternatively, four months’ notice with a six-month
restraint of trade. She chose the latter, hence
the duration of
the restraint in issue in these proceedings. The fact that the
amendment of the restraint agreement was effected
by way of addenda
to the contract of employment demonstrates how fundamentally
interrelated the two agreements were. For
practical purposes
the restraint agreement might just as well be considered as an
integral component of the contract of employment.
[7]
On
the basis of the wording of the engagement contract quoted above, the
respondents sought to argue in the answering affidavit
and in their
counsel’s heads of argument that the restraint agreement
applied only to Ms de Bruyn’s employment
as a trainee, and
that it had no application in respect of her subsequent engagement as
a buyer. The argument was not pursued
in the oral submissions,
however; advisedly so, in my judgment. The contention was
untenable. Not only would such a
construction be entirely
unbusinesslike; it is irreconcilable with the import of the addendum
agreements, which expressly contemplate
the continued employment of
the first respondent after the completion of her training, as indeed
did the original contract of employment,
which imposed penalties by
way of requiring the repayment of her training costs should Ms de
Bruyn leave the company within
24 months of being promoted to any one
of various positions, including that of buyer, at the end of her
training. It was
plain that the training to be undertaken by
her pursuant to the contract of engagement was intended to equip her
for longer term
employment in the company and that the attendant
covenant in restraint of trade was intended to operate with effect
from the termination
of such employment whenever that might be.
The intended longer term effect of the restraint agreement is
moreover confirmed
by the content of clause (b) of that agreement,
which read:
(b)
Without detracting from
the restraint provisions at the time of Truworths appointing you as a
designate buyer or designate merchandise
planner or similar (or
whatever title is used at the time), Truworths will offer you either
Truworths International Limited share
appreciation rights or a cash
amount (whichever Truworths chooses at the time) as at the date when
you are appointed as a designate
buyer or designate merchandise
planner.
[8]
Shares to the approximate value of R75 078
were set aside in August 2015 for Ms de Bruyn in terms of
paragraph (b) of
the restraint agreement. The allocation of
‘share appreciation rights’ apparently worked in a way
that meant
that 20% of the earmarked shares would vest in Ms de
Bruyn three years later, in August 2018, with a further 40% due to
vest
in 2019, and the last and remaining 40% in August 2020.
[9]
In the event, in March 2018, Ms de
Bruyn elected to take a cash payment of approximately R72 500 in
lieu of her share
options, then apparently valued at R113 295.
The agreement in terms of which Ms de Bruyn was permitted to take the
cash-out required her to remain in Truworths’ employ until at
least April 2020, failing which she was required to pay back
toTruworths an amount equivalent to the value of the shares when the
cash-out was made. Ms de Bruyn was consequently required
to
sign an acknowledgment of debt in favour of Truworths in the amount
of R113 295 when she left their employment in January
2020.
[10]
In its founding papers, Truworths alleged
that the ‘share appreciation rights’ constituted a form
of financial reward
in consideration of the employee’s
undertaking of the obligations in terms of the restraint agreement.
I do not think
that claim bears scrutiny, notwithstanding that the
provision appears in the restraint agreement, rather than in the
contract of
engagement where it might more logically belong. It
seems to me that the offer of shares, or a cash payment in lieu
thereof,
was instead intended to operate as an incentive to the
employee to remain in the company’s employ for a minimum of no
less
than three, and preferably at least five, years after the date
of her appointment to the position of designate buyer or merchandise
planner. I therefore do not accept that Ms Bruyn was at
any time given any financial consideration for being placed
under the
contracted restraint. For the same reason, I also reject the
respondents’ argument that the restraint cannot
be enforced
because Truworths has required Ms de Bruyn to pay back the value of
the shares.
[11]
During her employment as a buyer with
Truworths, Ms de Bruyn was engaged exclusively in working on the
company’s ‘
Hey Betty
’
range of casual women’s clothing. According to the
deponent to the founding affidavit, a buyer at Truworths
‘interprets
international fashion trends … and then designs or identifies
designs to brief suppliers to manufacture
merchandise appropriate to
the local market. The buyer’s focus is on the products
themselves, including fabric selection,
design, colour, price and the
need for variety within a range . The buyer has knowledge of
what will sell, what can be ordered,
and how much to order. A
buyer must not only know the market, but also understand what
suppliers can deliver. A buyer must
assist sales and amend orders and
revise plans based on her (and her colleagues’) assessment’.
[12]
Truworths plans what will be put on sale in
its shops well ahead of time. For clothing, it divides its
sales year into four
seasons; two summer seasons (‘Summer A’
and ‘Summer B’) and two winter seasons (‘Winter C’
and ‘Winter D’). Summer A is the period from July
to the end of September, Summer B is from October to the end
of
December, Winter C runs from January to the end of March and Winter D
from April to the end of June. Planning for selling
in these
seasons occurs well ahead of time.
[13]
A seasonal fashion overview in respect of
each season is conducted by Truworths’ ‘Fashion Studio’.
The Fashion
Studio is a team of specialist fashion designers. It
monitors fashion trends in Europe, Africa and North America.
The
team travels to markets and fairs abroad. They inform the
buyers of their predictions, collaborating with buyers to apply
their
knowledge in the business. The Fashion Studio provides
Truworths with its strategic direction, and is reportedly key
to its
success.
[14]
Ms de Bruyn attended ‘the winter 2020
overview’ held in May 2019. She had also attended the winter
fabric fair at which
Truworths’ suppliers showcased their
winter fabric for 2020 and the winter 2020 knitwear yarn fair, where
the suppliers showcased
their winter yarns and ‘forward focus’.
She attended a number of other planning-related events that
would bear
on the clothing to be marketed in Truworths shops in the
first six months of 2020. As part of her duties she was also
required
to buy in the stock for the first two months of the ‘
Hey
Betty
’ summer range (July and
August 2020) and to plan product for the whole of Summer A and B.
She attended a number of
meetings in this regard and was involved in
planning for the summer 2020 season. It is alleged that ‘[t]his
means that
[Ms] de Bruyn is aware of Truworths intended business
direction until December 2020, for which orders have been placed
until August
2020’.
[15]
It is also alleged that Ms de Bruyn was
exposed to Truworths bargaining strategies in respect of supplier
price negotiations for
the months of January to December 2020.
Truworths buyers are reportedly required to develop ‘a supplier
strategy’
that ensures that merchandise to be manufactured is
allocated to the best source of supply, and is well balanced across
suppliers
- so as to mitigate the risk of non-delivery by certain
suppliers.
[16]
It is clear then that Ms de Bruyn has been
closely involved in the preparation of what Truworths will market in
its ‘
Hey Betty
’
range during the coming year, especially in the first part of the
year. Her exposure in the course of her work to
other ranges of
clothing marketed by Truworths was tangential. It is also clear
from the evidence adduced by the applicant
that arrangements for what
will appear on the shelves of Truworths shops have to be made months
ahead of the relevant selling periods.
Fabrics have to be
chosen, colours selected, designs settled upon and suppliers
contracted in order for the finished clothing to
be ready and
available in the determined quantities to be put on sale at the
scheduled time in the appropriate season. While
they might well
have their own different ways of going about it, it seems to me to be
axiomatic that a comparable process would
have to be gone through by
any large-scale retailer of fashion clothing.
[17]
The detail might be expected to differ
depending on the nature of the clothing involved. The nature of
the women’s clothing
in Truworths’ ‘
Hey
Betty
’ range is described as
‘casual wear’, whereas as that produced and marketed
under the adidas label is described
as ‘sport’ or
‘active’ wear. It seems to me as a matter of common
logic that these differences would
obviously affect issues of design,
fabric choice and colour, and to some extent, possibly, supply, being
the type of matters in
which Ms de Bruyn was involved when she worked
at Truworths.
[18]
The difference between the look and
character of ‘
Hey Betty
’
clothing and adidas clothing is graphically illustrated in the
respective colour catalogues of clothing advertised online
in the
‘
Hey Betty
’
range and the adidas women’s clothing range, copies of which
were attached to the founding affidavit as annexures
FA1 and FA2,
respectively. In my judgment, it is difficult to conceive that
a customer looking to buy sporting wear of the
sort advertised on the
adidas website would be tempted to consider the type of clothes
advertised on the Truworths site under the
‘
Hey
Betty
’ brand. The clothing
in the two ranges looks to have been designed to be marketed to two
quite different markets for
likely use in two quite different
contexts. The styles are distinctly different. I accept
that the same customer might
decide to buy ‘
Hey
Betty
’ clothing to be worn on
certain occasions and also adidas sportswear for use in other
circumstances, but it strikes me as
most unlikely that that customer
would ever be in a position of having to make a choice between the
two brands when deciding on
a purchase of clothing for one particular
use.
[19]
When it comes to the question of sales
strategy and planning, the deponent to the answering affidavit has
described that adidas
operates on an entirely different model to
Truworths’ inhouse ‘
Hey
Betty
’ range. The adidas
ranges are planned and executed overseas in hubs or bases in Germany,
Japan and the United States.
Buyers employed in adidas’s
South African company are not involved in the process at all. A
buyer in Ms de Bruyn’s
position, employed in the South African
company, would be required to select clothing from an inhouse
brochure of available adidas
products for sale in the local market.
The idea would be not to decide what adidas should design and have
manufactured for
sale in South Africa, but rather to determine from
the products that adidas has already had designed for sale in the
relevant period
those which should be marketed in this country.
The evidence is that the range of products that will be available to
be sold
in adidas’s local markets around the world in 2020 has
already been determined, and that in those circumstances any
knowledge
that Ms de Bruyn might have about Truworths’ plans
for its clothing ranges for 2020 has no scope for application in
influencing
what adidas might put on the shelves during that year.
Adidas emphasizes that in any event the nature of Ms de Bruyn’s
job description in her employment with it differs materially from
that in her employment with Truworths. She will not be
involved
in design, fabric and colour choices, or in dealing with suppliers.
[20]
The approach to be taken by the courts when
determining applications for the enforcement of restraint of trade
agreements has been
settled in a number of appeal court judgments
handed down over the last 35 years. I was referred in argument
to an earlier
judgment of this court (per Breitenbach AJ)
in
Zero Model Management (Pty) Ltd v
Barnard and Another
[2009] ZAWCHC 232
(18 December 2009), which, in paras. 34-38, provides the following
accurate summary of the import of the pertinent case law that
I am
grateful, in the context of preparing this judgment under the
exigency of urgency, to be able to adopt:
34.
In
Magna
Alloys and Research (SA) (Pty) Ltd v Ellis
[1984]
ZASCA 116
;
1984 (4) SA 874
(A) the Appellate Division
(as it was then known) held that the principle, followed in many
earlier South African judgments,
that a restraint of trade agreement
is
prima facie
invalid
or unenforceable stemmed from English law and not our common law,
which contains no rule to that effect. The correct approach
is to
examine a restraint of trade agreement with regard to its own
circumstances to ascertain whether enforcing it would be contrary
to
public policy, in which case it would be unenforceable. When a party
alleges that he is not bound by a restraint of trade to
which he had
agreed, he bears the
onus
of
proving that the enforcement of the agreement would be contrary to
public policy. Although public policy requires that
agreements freely
entered into should be complied with, it also requires, generally,
that everyone should be free to seek fulfilment
in the business and
professional world and, consequently, an unreasonable restriction of
a person’s freedom to do so will
not be enforced. The court
must have regard to the circumstances obtaining at the time when it
is asked to enforce the restriction.
The court is not limited to a
finding in regard to the agreement as a whole, but is entitled to
declare the agreement partially
enforceable or unenforceable.
35.
In
Reddy
v Siemens Telecommunications (Pty) Ltd
2007 (2) SA 486
(SCA) at paragraph 11, the Supreme Court of
Appeal (“SCA”) endorsed the summary of the effect of
the
Magna Alloys
judgment
in
J Louw and Co (Pty) Ltd v Richter and
Others
1987 (2) SA 237
(N) at 243B
to C:
“
Covenants in restraint of trade are valid.
Like all other contractual stipulations, however, they are
unenforceable when, and to
the extent that, their enforcement would
be contrary to public policy. It is against public policy to enforce
a covenant which
is unreasonable, one which unreasonably restricts
the covenantor’s freedom to trade or to work. Insofar as it has
that effect,
the covenant will not therefore be enforced. Whether it
is indeed unreasonable must be determined with reference to the
circumstances
of the case. Such circumstances are not limited to
those that existed when the parties entered into the covenant.
Account must
also be taken of what has happened since then and, in
particular, of the situation prevailing at the time enforcement is
sought.
”
36.
In
Reddy
the
SCA added that determining whether a restraint agreement unreasonably
restricts the freedom to trade or to work of the
“
covenantor
”
(i.e. the party resisting enforcement), is a value judgment which the
court must make with two principal policy considerations
in mind
(paragraph 15):
“
The first is that the public interest requires
that parties should comply with their contractual obligations, a
notion expressed
by the maxim pacta servanda sunt. The second is that
all persons should in the interests of society be productive and be
permitted
to engage in trade and commerce or the professions. Both
considerations reflect not only common-law but also constitutional
values.
Contractual autonomy is part of freedom informing the
constitutional value of dignity, and it is by entering into contracts
that
an individual takes part in economic life. In this sense,
freedom to contract is an integral part of the fundamental right
referred
to in s 22. Section 22 of the Constitution guarantees
‘[e]very citizen ... the right to choose their trade,
occupation
or profession freely’ reflecting the closeness of
the relationship between the freedom to choose a vocation and the
nature
of a society based on human dignity as contemplated by the
Constitution. It is also an incident of the right to property to the
extent that s 25 protects the acquisition, use, enjoyment and
exploitation of property, and of the fundamental rights in respect
of
freedom of association (s 18), labour relations (s 23) and
cultural, religious and linguistic communities (s 31).
”
37.
In
Reddy
the
SCA explained the manner in which these two principal considerations
should be applied, as follows (at paragraph 16):
“
In applying these two principal
considerations, the particular interests must be examined. A
restraint would be unenforceable if
it prevents a party after
termination of his or her employment from partaking in trade or
commerce without a corresponding interest
of the other party
deserving of protection. Such a restraint is not in the public
interest. Moreover, a restraint which is reasonable
as between the
parties may for some other reason be contrary to the public interest.
In Basson v Chilwan and Others
[1993]
ZASCA 61
;
[1993
(3) SA 742
(A) at 767G to H
[
[1]
]
]
,
Nienaber JA identified four questions that should be asked when
considering the reasonableness of a restraint: (a) Does the one
party
have an interest that deserves protection after termination of the
agreement? (b) If so, is that interest threatened by the
other party?
(c) In that case, does such interest weigh qualitatively and
quantitatively against the interest of the other party
not to be
economically inactive and unproductive? (d) Is there an aspect of
public policy having nothing to do with the relationship
between the
parties that requires that the restraint be maintained or rejected?
Where the interest of the party sought to be restrained
weighs more
than the interest to be protected, the restraint is unreasonable and
consequently unenforceable. The enquiry which
is undertaken at the
time of enforcement covers a wide field and includes the nature,
extent and duration of the restraint and
factors peculiar to the
parties and their respective bargaining powers and interests
”.
38.
In
Reddy
at
paragraph 17 the SCA added a fifth question to the four set out
in
Basson
, which
it said was implied by question (c) and corresponds with the factor
in s 36(1)(e) of the Constitution of the Republic
of South
Africa, 1996 (“the Constitution”), namely whether the
restraint goes further than necessary to protect the
interest of the
party that deserves protection after termination of the employment
agreement.
[21]
The respondents contended that the
restraint was indiscriminately wide. It has been held before
that restraint agreements
that are unduly oppressive are contrary to
public policy and unenforceable. The respondents point out that
on a literal construction
of the agreement Ms de Bruyn would be
prohibited from taking up any position whatsoever with any of
Truworths’ competitors
or their suppliers, even if the work
involved there bore no relationship whatsoever to that which she had
been doing, or any proprietary
information she had been exposed to,
whilst employed at Truworths. It is possible to construe the
agreement to that effect,
but I do not think that to do so would give
a sensible or businesslike construction of it. On the contrary,
I think it is
evident, when the relevant agreements are construed
holistically and in the manner enjoined in
Endumeni
Municipality
,
[2]
that the object of the restraint would have been commonly understood
by the contracting parties to have been directed at affording
protection to Truworths’ legitimate proprietary interests
should the employee have the opportunity within the first six months
after leaving Truworths’ employment to take up a position with
a competitor or a competitor’s supplier.
[22]
To the extent that certain averments by the
deponent to Truworths’ founding affidavit appear to suggest
that he considered
the restraint agreement might be applied merely to
protect Truworths against competition he was misguided. If that
were the
intended effect of the agreement, it would not be
enforceable; cf.
Basson v Chilwan
supra, at 767E-F (SALR). The only legitimate object to which a
covenant in restraint of trade can be directed is the protection
of a
legally cognisable proprietary interest of the covenantee
(‘vermoënsbelang’) such as confidential information,
customer connections or goodwill; cf. e.g.
Sibex
Engineering Services (Pty) Ltd v Van Wyk and Another
1991 (2) SA 482
(T),
[1991] 4 All SA 262
, at 507D-F (SALR),
[3]
Rawlins and Another v Caravantruck (Pty)
Ltd
[1992] ZASCA 204
;
1993 (1) SA 537
(A) at 540-541 and
Automotive Tooling Systems (Pty) Ltd v
Wilkens and Others
[2006] ZASCA 167
(28
September
2006); 2007 (2) SA 271
(SCA);
[2007] 4 All SA 1073
, at
para. 8.
[23]
I think it has been established in the
current case that Truworths does indeed have a proprietary interest
notionally deserving
of protection by means of the imposition of
restraint of trade agreements on its employees engaged in the
planning, design and
marketing of its inhouse ‘
Hey
Betty
’ range. I can readily
accept that its confidential information in this connection might
well be useful if disclosed
to competitors in affording them an
unfair competitive advantage. The likelihood of such an
advantage actually being provided
in any given situation will, of
course, depend on the peculiar circumstances of the case. It is
recognition of that axiom
that no doubt explains the approach
enunciated in
Magna Alloys
supra, that it is the circumstances that prevail when a covenant in
restraint of trade is sought to be enforced, rather than those
pertaining when it was entered into, to which particular regard will
be had when determining whether or not it would contrary to
public
policy to give it effect.
[24]
Accepting, as I do, that Truworths did have
an interest that deserved protection after termination of the
contract of employment
between itself and Ms de Bruyn, the
enquiry concerning whether the restraint should be enforced or not in
the given circumstances
must move on to the second and third
questions in the check list devised by Nienaber JA in
Basson
v Chilwan
that is set out in the
quotation, above, from
Zero Model
Management
, viz. (2) ‘
is
that interest threatened by the other party?
’,
and (3), if it is, ‘
does such
interest weigh qualitatively and quantitatively against the interest
of the other party not to be economically inactive
and
unproductive?
’. The
evidence suggests, in line with common experience, that fashion is a
constantly changing phenomenon, and that
consequently any proprietary
information that Ms de Bruyn is able to take with her concerning
Truworths’ strategies and planning
concerning its ‘
Hey
Betty
’ range could be of only
very limited usefulness to a competitor beyond the end of 2020.
If anything, assuming, as I
think one reasonably might, that the
duration of the agreed restraint had been calculated with regard to
the need for Truworths’
proprietary interests to be adequately
protected, the six-month period of the restraint, which in this case
would lapse at the
end of July 2020, serves to verify that
impression. The evidence also demonstrates that any knowledge
concerning the ‘
Hey Betty
’
range that Ms de Bruyn has taken with her from her employment at
Truworths is unlikely to have any practical application
in her work
at adidas, where she will be involved in working with a quite
distinguishable range of women’s clothing in the
context of an
entirely different work model, and where the marketing plans and
strategies for the 2020 calendar year have already
been settled.
The skills and experience that Ms de Bruyn has developed as a buyer
while in the employ of Truworths will,
of course, be of practical
benefit to adidas under her new employment, but it is trite that
those are personal to her, and not
proprietary to her employer, even
if that employer might have expended time and money on training
her.
[4]
In all the circumstances I do not consider that Truworths’
protectable interests are threatened by Ms de Bruyn’s
employment by adidas.
[25]
But were I wrong in my conclusion that the
applicant’s interests are not threatened, I would in any event
consider that in
the given circumstances, and for the same reasons as
those recorded in the previous paragraph, that Truworths’
interest in
being protected did not weigh sufficiently, qualitatively
or quantitively, against that of Ms de Bruyn not to be
economically
inactive or unproductive. I therefore hold that it
would be unreasonable in the peculiar circumstances for the restraint
agreement to be enforced. It was not suggested in argument that
there is any aspect of public policy having nothing to do
with the
relationship between the parties that requires that the restraint be
maintained or rejected. The fourth question
in the
Basson
v Chilwan
checklist therefore does not
call to be answered.
[26]
In the result, the following orders are
made:
1.
Insofar
as remains necessary, the applicant’s non-compliance with the
time periods, forms and manner of service ordinarily
prescribed in
terms of the rules of court is condoned and the application is
entertained as one of urgency in terms of rule 6(12)(a)
of the
Uniform Rules of Court.
2.
The
application is dismissed with costs, including the fees of two
counsel.
A.G. BINNS-WARD
Judge
of the High Court
APPEARANCES
Applicant’s counsel:
A.R. Sholto-Douglas SC
R. Patrick
Applicant’s attorneys:
Bowmans
Cape Town
Respondents’ counsel:
I. Jamie SC
P. Olivier
Respondents’ attorneys:
Webber Wentzel
Sandton and Cape Town
[1]
Also reported at [1993] 2 All SA 373 (A).
[2]
Natal Joint Municipal Pension Fund v Endumeni
Municipality
[2012] ZASCA 13
(16 March
2012);
[2012] 2 All SA 262
(SCA);
2012 (4) SA 593
, at para.18.
[3]
Cited in
Reddy
supra, para. 18 at footnotes 31 and 32.
[4]
I have described above (at para. [7]) the quite
discrete contractual measures that Truworths put in place to protect
itself against
any unproductive expenditure on training Ms de
Bruyn.