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2023
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[2023] ZAFSHC 378
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Zestibex CC t/a Silent Alarms v Willemse and Another (1094/2023) [2023] ZAFSHC 378 (26 September 2023)
FLYNOTES:
LABOUR – Restraint –
Poaching
employees and clients
–
Applicant
is provider of security services and employee left to join
competitor – Allegations that she is poaching its
employees
and clients – Knowledge of pricing of products secured from
supplier – Facebook post by former employee
inviting members
to contact her for security assessment – Tariffs of supplier
not exclusive to applicant – Suspicions
of poaching not
supported by facts – No evidence that she used applicant’s
pricing strategy and profit margins
to advance competitor’s
business – Application dismissed.
IN THE HIGH COURT
OF SOUTH AFRICA,
FREE STATE
DIVISION, BLOEMFONTEIN
Case Number: 1094/2023
Reportable: YES/NO
Of Interest to other
Judges: YES/NO
Circulate to
Magistrates: YES/NO
In the matter between: -
ZESTIBEX
CC
APPLICANT
t/a SILENT ALARMS
[Registration number:
2011/048206/23]
and
MARIA
MAGDALENA WILLEMSE
1
ST
RESPONDENT
BETHNET
SECURITY
2
ND
RESPONDENT
t/a BETHSEC
CORAM:
MBHELE, DJP
HEARD
ON:
15
JUNE 2023
DELIVERED
ON:
26 SEPTEMBER 2023
[1]
The applicant, an erstwhile employer
of the 1
st
respondent, approached this court seeking a
relief enforcing a restraint of trade. The relief is sought in the
following terms:
1.1
The first respondent is interdicted until 28 February 2024, from
either herself or as an
agent, employee or partner of anyone else,
persuade, solicit, encourage or provide any other employee of the
applicant to become
employee by, or interest in any matter whatsoever
in any other business, firm or undertaking which is in direct or
indirect competition
with the business carried out by the applicant.
(sic.)
1.2
The first respondent is interdicted
and shall not until 28 February 2024, solicit, interfere,
with or
entice or endeavour to entice away from the applicant any person,
firm or company who or which was a customer of the applicant
or was
accustomed to deal with the applicant.
1.3
The interdicts in paragraphs 1 and 2 of this order shall operate in
respect of a 50 kilometre
radius of Bethlehem until 28 February 2024.
[2]
The following are common cause:
That:
2.1
The applicant is a provider of
security services in the Bethlehem area which include the
installation
of CCTV cameras, off-site monitoring, armed response
reaction and associated services.
2.2
The applicant buys its security products from Spectrum Security
Services (Pty) Ltd (Spectrum)
2.3
The first respondent left the
applicant’s employment on 22 October 2022. During September
2022 the first respondent served a resignation letter on the
applicant indicating that she would serve her notice until 22 October
2022. The applicant informed her on 14 October 2022 that it was no
longer necessary for her to serve her notice period until 22
October
2022 and that she would be paid her full salary.
2.4
The first respondent signed an
employment contract containing confidentiality clause and restrained
of trade clause with the applicant during January 2019. This contract
imposed a restrained of trade for 12 months.
2.5
In terms of this contract the first respondent agreed to, within a
period of one year after
termination of her service with the
applicant not be involved in a business that competes with the
applicant within the Bethelem
area.
2.5
The first respondent became an
employee of the second respondent (Bethnet) on 22 October. Bethnet
does to a large extent render the same type of security services as
the applicant.
2.6
The applicant does not take issue with
the first respondent’s employment at Bethnet but
however
insists that the first respondent should refrain from persuading,
inducing, soliciting, encouraging or perocuring other
employees or
customers of the applicant to become employed by or contracted with
Bethnet.
2.6
The first respondent advertised on her facebook page and invited
members of the public to
contact her for a free assessment of their
security needs.
2.7
The first respondent was, over and
above the employment contract signed in 2019, made to sign
a
restraint of trade contract in July 2021 which imposed 18 months’
restraint of trade.
2.8
At the end of March 2022 the applicant presented the first respondent
with another employment
contract which was only signed by the
applicant. This contract imposed 12 months restraint of trade period.
2.8
The Bethnet received its PSIRA
certificate on 16 February 2023 and started operating on 1 March
2023.
[3]
The applicant
submits that the first respondent voluntarily signed another
restraint of trade contract in July 2021 which increased
the period
of restraint from 12 to 18 months. The gravamen of the
applicant’s complaint is that after the departure
of the
respondent most of its clients left and three of its employees joined
the second respondent. The applicant alleges
that one of
its clients, a certain Mr. Visser, informed the deponent to the
founding affidavit (Mr. Raimondo) that the first respondent
contacted
him enquiring whether he would not consider appointing Bethnet to
provide his business with security services.
Raimondo suspects
that three of the applicant’s employees who resigned from the
applicant to join Bethnet were enticed by
the first respondent to
join Bethnet. The applicant, further, contends that the first
respondent invited the head of applicant’s
reaction unit, Mr.
Anton Dreyer, to join Bethnet and he turned down the offer. The
applicant submits that the first respondent’s
knowledge of
confidential information relating to tariffs and prices that the
applicant pays at Spectrum enables her to provide
more competitive
pricing which would drive the applicant out of business. It is the
applicant’s view that the first respondent’s
use of the
information violates her restraint of trade agreement and has injured
the applicant’s business.
[4]
The first respondent denies that the
information about the pricing tariffs and models received
by the
applicant from Spectrum is confidential information that is worthy of
protection because the tariffs are standard and accessible
to all
Spectrum clients. The first respondent submits that she did not sign
page 1 of Annexure FA 14 to the founding affidavit
and is not
familiar with the contents thereof and the confidentiality agreement
that is referred to in that document.
[5]
She in essence denies that she entered into
a further restraint of trade agreement. She denies
ever enticing the
applicant’s employees to join Bethnet. The deponent in the
founding affidavit Messrs Vino Ferendale, Ivan
Dicks, Jackie Windt
and Schalk Koekemoer that the deponent in the founding affidavit, Mr.
Raimondo, suspects the respondent enticed,
confirmed in their
affidavits that they were never approached by the first respondent.
Mr. Dreyer whom the applicant alleges that
the first respondent
approached could not confirm that.
[6]
The only reason she interacted with
one Mr. Visser, an applicant’s client, was because
he had
concerns with his internet and wanted fibre which the applicant was
not in the position to provide him with because he stays
too remote
from town.
The
first respondent, further, contends that the applicant’s
pricing strategy and profit margins are of no use to Bethnet
because
the applicant’s profit margins on certain products are so high
that the applicant priced itself out of the market.
[7]
These are motion proceedings which have to be
adjudicated on the principles set out in
Plascon
Evans Paints Ltd v van Riebeeck Paints (Pty) Ltd
[1]
[1984] ZASCA 51
;
1984 (3) SA 623
(A)
.
It is a well-established principle that where a bona fide dispute of
facts exists, the matter has to be decide on the respondent’s
version
together
with the admitted or undenied facts in the applicants’ founding
affidavit which provide the factual basis for the
determination
unless the dispute is not real or genuine and the version of the
respondent is untenable and farfetched. See
Thebe
Ya Bophelo Healthcare Administrators (Pty) Ltd and Others v National
Bargaining Council for the Road Freight Industry and
Another
[2]
[8]
Although the first respondent acknowledges the existence of the
restraint of trade signed in January
2019 she denies knowledge of the
contents of the second restraint of trade agreement (Annexure FA14).
She also denies knowledge
of the confidentiality agreement that is
referred to in Annexure FA 14. The applicant was unable to shed light
on why the first
page of this contract was not signed by the
respondent although it was signed on behalf of the applicant on both
pages. I am unable
to find that the respondent’s version, on
whether or not she knew what the first page of FA 14 contained, is
farfetched and
untenable. This point has to be decided in favour of
the first respondent.
[9]
Our
constitution protects every citizen’s right to practice their
trade to earn a living and to freely sell their skills.
It further
protects their right to enter into legally binding contracts and once
they have concluded such contracts they are expected
to respect them
and keep their end of the bargain.
It
is trite that restraints of trade agreements are valid and binding,
as well as enforceable, provided the enforcement thereof
is
reasonable. See
Magna
Alloys & Research (S.A) (Pty) Ltd. v Ellis
[3]
[10]
The test to determine the reasonableness of a restraint of
trade agreement was set out in
Basson
v Chilwan and Others
[4]
. The test requires that the following must be assessed to determine
the reasonableness of the restraint of trade agreement. (a)
Is there
an interest of the one party, which is deserving of protection at the
termination of the agreement? (b) Is that interest
being prejudiced
by the other party? (c) If so, does the interest weigh up
qualitatively and quantitatively against the interest
of the latter
party, that the latter should not be economically inactive and
unproductive? (d) Is there another facet of public
policy having
nothing to do with the relationship between the parties, but which
requires that the restraint should either be maintained
or rejected?
[11]
In
Reddy
v Siemens Telecommunications (Pty) Ltd
[5]
Malan
AJA remarked as follows when dealing with the reasonableness of the
agreement in restraint of trade:
‘
[15]
A court must make a value judgment with two principal policy
considerations in mind in determining the reasonableness of a
restraint. 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).
[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.’
[12]
Does the applicant have protectable interests. Is the information
that the first respondent had access to
while in the employ of the
applicant that is worthy of protection. The applicant argued that the
first respondent enticed its clients
and employees to leave the
applicant and join second respondent. These allegations are not
supported by the available evidence.
[13]
In
Pinnacle
Technology Shared Management Services (Pty) Limited and Another
Venter and Another
[6]
[57]
It seems to me that, where a company has competitors, adjustments to
its profit margins and discount packages will be made
fairly often.
Unlike a ‘secret recipe’, the exact amount of profit a
company sets out to make or gives up by way of
discount to attract
business on any given deal is not an immutable piece of information.
Likewise, knowing this information
does not give a competitor a
permanent advantage.
[58]
If the second respondent were to come to know this information, there
is nothing to suggest that it would be able to better
the prices the
applicants already offer their customers. While it is not ideal
that a competitor knows the applicant’s
exact mark-up, it
strikes me that undercutting, itself, is a routine business
threat.
[14]
The applicant’s own version shows that on Spectrum’s
website potential clients are invited to
contact spectrum for more
information on pricing. This shows that the tariffs paid by the
applicant to Spectrum are not exclusive
to the applicant and as such
not so confidential that no other client may have access to. What
makes it more difficult to comprehend
is that the applicant did not
shed light on how its specialised tariffs, discounts from Spectrum
and pricing strategy are structured
and how unique are they from all
other clients of Spectrum.
[15]
The applicant takes no issue with the first respondent’s
employment at Bethnet. The gravamen
of the applicant’s
complaint is a
facebook
post by the first respondent wherein
she invited members of public (potential clients) to contact her at
Bethnet for assessment
of their security needs. The post was not
intended for the applicant’s clients. The fear by the applicant
that the first
respondent is poaching its employees and clients is
not supported by facts, it remains a suspicion which cannot be given
credence
to. There is, further, no evidence that the first respondent
used the applicant’s pricing strategy and profit margins to
advance Bethnet’s business. The application cannot succeed.
[16]
Costs are in the discretion of the court. The applicant approached
court in a belief that it has a
protectable interest that has been
breached based on the existence of the agreement between itself and
the first respondent. I
am unable to find that it was unreasonable in
doing so. This is the type of matter where each party must pay its
own costs.
[17] I therefore make the
following order:
ORDER:
1.
The
application is dismissed
2.
Each
party to pay its own costs.
N.M.
MBHELE, DJP
Appearances:
For the Applicant:
Adv J.S Rautenbach
Instructed by
SYMINGTON & DE KOK
Bloemfontein
For the Respondents: Adv.
M.D Steenkamp
Instructed by
VOSLOO ATTORNEYS
Bloemfontein
[1]
1984 (3) SA 623 (A)
[2]
(2009) 30 ILJ 1031(W)25
[3]
(1984) 2 All SA 583 (A); 1984 (4) SA 874 (A)
[4]
1993 (2) SA 742 (A)
[5]
2007
(2) SA 486 (SCA)
[6]
(J1095/15) [2015] ZALCJHB 199 (14 July 2015)