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[2015] ZALCJHB 451
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Massmart Holdings Ltd and Others v Vieira and Others (J1945/15) [2015] ZALCJHB 451 (3 November 2015)
Not
reportable
THE LABOUR COURT OF
SOUTH AFRICA, JOHANNESBURG
JUDGMENT
C
ase
no: J 1945/15
In
the matter between:
MASSMART
HOLDINGS LTD
First Applicant
MASSSTORES
(PTY) LTD
Second Applicant
MASSTORES
(PTY) LTD
Third Applicant
and
TYRONE
VIEIRA
First respondent
JD
GROUP LTD
Second respondent
JDG
TRADING (PTY) LTD
Third Respondent
STEINHOFF
DOORS AND BUILDING MATERIAL
(PTY)
Fourth
Respondent
Heard
:
3 November 20
Judgment
delivered
:
13
November 2015
JUDGMENT
VAN
NIEKERK J
[1]
The first respondent (Vieira) has been employed by the first
applicant (Massmart) and its predecessors for some 22 years. He
is
currently Massmart’s group general merchandising executive. On
28 June 2002, Vieira signed a restraint of trade and confidentiality
agreement which, in essence, precludes him on termination of his
employment with Massmart from being employed anywhere within the
Republic of South Africa by a competitor of Massmart for a
period of 24 months. In consideration for the restraint, Vieira
was
paid an amount equivalent to 2 years’ remuneration, based on
his remuneration package at the time. Vieira resigned from
Massmart
on 15 May 2015 giving six months’ notice, as he was
contractually obliged to do. Vieira was suspended on 2 September
2015, on full pay, and has had no access to his office or any of the
applicants’ business affairs since then. Vieira intends
to take
up employment with the third respondent (JDG Trading) on 16 September
2015. In this application, the applicants seek on
an urgent basis to
enforce the restraint agreement. The application is opposed by
Vieira; the second, third and fourth respondents
abide by the
decision of the court.
[2]
Although the respondents initially contested that the application was
urgent, the parties have agreed that the matter should
be dealt with
on an urgent basis. In so far as it is necessary to condone the late
filing of the applicants’ replying affidavit,
condonation is
granted.
[3]
There is no dispute that Vieira agreed to the restraint undertakings,
and that his intended employment by the JDG Trading will
constitute a
breach of those undertakings. The primary issue in dispute is whether
Vieira’s employment by the JDG Trading,
as Vieira contends,
poses no threat to the applicants’ business, with the result
that the restraint is unreasonable. Put
another way, Vieira contends
that the information to which he has been exposed while employed by
Massmart is not useful to the
respondents or of any economic value to
them because of the peculiar nature of the market in which they
operate. Vieira also contends
that even if the court were to hold
that restraint is reasonable, the period for which enforcement is
sought (24 months) is unreasonably
long.
[4]
The applicable legal principles are well-established, and it is not
necessary to repeat them here in more than summary form.
Restraint
agreements are enforceable unless they are unreasonable (see
Magna
Alloys and Research (SA) (Pty) Ltd v Ellis
[1984] ZASCA 116
;
1984 (4) SA 874
(A)).
In general terms, a restraint will be unreasonable if it does not
protect some proprietary interest of the party seeking
to enforce a
restraint. In other words, a restraint cannot operate only to
eliminate competition. The party seeking to enforce
a restraint need
only invoke the restraint agreement and prove a breach of the
agreement, nothing more. The party seeking to avoid
the restraint
bears the onus to establish, on a balance of probabilities, that the
restraint agreement is unenforceable because
it is unreasonable (see
2013 (1) SA 135
;
Magna Alloys and Research (SA) (Pty) Ltd
supra;
Den Braven SA (Pty) Ltd v Pillay and another
2008 (6) SA 229
(D)).
[5]
One of the most influential statements of the law in regard to the
determination of the reasonableness or otherwise of a restraint
of
trade agreement is that in
Basson v Chilwan and others
1993 SA
742
(A). In that judgment, the court established the following test:
1.
Is there an interest of the one party, which is deserving of
protection at the termination of the agreement?
2.
Is such interest being prejudiced by the other party?
3.
If so, does such interest weighs up qualitatively and quantitatively
against the interests of the latter party
that the latter should not
be economically inactive and unproductive?
4.
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?
[6]
The proprietary interests that can legitimately be protected by a
restraint agreement, generally speaking, fall into two categories.
The first is confidential information which is useful for the
carrying on of the business and which could be used by a competitor,
if it were to be disclosed to that competitor, to gain a relative
competitive advantage (sometimes referred to as ‘trade
secrets’). The second is relationships with customers,
potential customers, suppliers and others that go to make up what
is
sometimes referred to as the ‘trade connection’ of the
business, this being an important aspect of its incorporeal
property
known as goodwill.
[7]
Whether information constitutes a trade secret is a question of fact
(see
Mossgas (Pty) ltd v Sasol Technology (Pty) Ltd
[1999] 3 B
All SA 321 (W) at 333),
Walter McNaughten (Pty) Ltd v Schwartz &
others
2004 (3) SA (C)). For information to be confidential, it
must be capable of application in trade or industry, i.e. it must be
useful
and not public knowledge and property; secondly, it must be
known to a restricted number of people or a close circle; and
thirdly,
it must be of economic value to the person seeking to
protect it (see
Townsend Productions (Pty) Ltd v Leech &
others
2001 (4) SA 33
(C)
Walter McNaughten (Pty) Ltd v
Schwartz & others
(supra).
[8]
The need by an employer to protect trade connections arises where an
employee has access to customers or suppliers and is in
a position to
build up a particular relationship with them so that when the
employee leaves the service of the employer, he or
she could easily
induce the employer’s customers and suppliers to follow him or
her to a new business. Again, this is a question
of fact, and often
one of degree.
[9]
It is incumbent on the employee under restraint to establish that he
or she had no access to confidential information and never
acquired
any significant personal knowledge of confidential information or
influence over the applicant’s customers while
in the
applicant’s employ (see
Rawlins
supra at 542F-543A). In
other words, it is enough for the party seeking to enforce a
restraint to show that trade connections through
customer or supplier
contact exist, and that they can be exploited if the employee was to
be employed by a competitor or compete
with the business of the
applicant. It is not for the applicant to have to run the risk of the
employee communicating its trade
secrets or utilising its customer
connections to the advantage of a competitor. It is also not
incumbent on an applicant to enquire
into the
bona fides
of
the employee or to demonstrate that he or she is
mala fides
before it is entitled to enforce a contractually agreed restraint.
The holder of the restraint also does not have to show that
the
employee in fact utilised information confidential to it – it
is enough that the employee could do so. As Marais J stated
in
BHT
Water treatment (Pty) Ltd v Leslie and another
1993 (1) SA 47
(W)
at 57J-58D:
In
my view, all that the applicant can do is to show that there is
secret information to which the respondent had access, and which
in
theory the first respondent could transmit to the second respondent
should he desire to do so. The very purpose of the restraint
agreement was that the applicant did not wish to have to rely on the
bona fides or lack of retained knowledge on the part of the
first
respondent, of the secret formulae. In my view, it cannot be
unreasonable for the applicant in the circumstances to enforce
the
bargain it has exacted to protect itself. Indeed, the very ratio
underlying the bargain was that the applicant should not have
to
content itself with crossing its fingers and hoping that the first
respondent would act honourably or abide by the undertakings
that he
has given.
[10]
The applicant seeks final relief. To the extent that there are
factual disputes between the parties, the court is bound
to
follow the approach set out in
Plascon Evans Paints (Pty)
Ltd v Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A). Where
the facts concerning the reasonableness of the enforcement of the
restraint or the possible risk of harm to the applicant’s
business have been fully canvassed and the evidence, any facts that
are in dispute must necessarily be resolved in favour of Vieira,
regardless of the fact that he is required to discharge the onus of
showing that in relation to the applicants’ proprietary
interests, the restraint is unreasonable and accordingly
unenforceable.
[11]
As I have indicated above, it is not in dispute that the restraint
agreement was concluded in favour of Massmart on 28 June
2002, when
Vieira was employed as the merchandising manager of Game stores. It
is also not in dispute that Vieira has accepted
a position with JDG
Trading and that he will commence employment as a business
development executive on 16 November 2015.
[12]
Massmart is a group holding company listed on the JSE. The second and
third applicants are subsidiaries of Massmart. Masstores
trades as
Makro, Game and Dion Wired. Massbuild trades as Builder’s
Superstore, Builder’s Trade Depot, Builder’s
Express and
Builder’s Warehouse.
[13]
Vieira’s case is that the only real area of competition that
arises between JDG Trading and Massmart is in the electronics
market,
through JDG Trading’s Hi-Fi Corporation stores and its
Incredible Connection stores, which compete directly with
Game, Dion
Wired and Makro. Vieira contends that the business of many of the
divisions of JDG Trading sell different products (mostly
furniture)
to different categories of customers (mainly low-income and credit)
in different geographic areas to the customers and
areas serviced by
Massmart and the second and third applicants. That dispute aside,
Vieira contends that irrespective of the extent
of the competitive
interface between the parties, the information to which he had access
while employed by Massmart and its relationships
with suppliers is of
no use to JDG Trading and is not capable of causing harm to the
business of the applicants.
[14]
The relevant part of the restraint agreement reads as follows:
4.3
The employee shall not, within the restraint period, whether as
proprietor, partner,
director, shareholder, member, employee,
consultant, contractor, financier, agent, representative, assistant,
trustee or beneficiary
of a trust or otherwise and with a full reward
or not, directly or indirectly, carry on or be interested or engaged
in or concerned
with employed by any company, close corporation,
firm, undertaking or concern carried on in any of the prescribed
areas which is
a prescribed competitor or a prescribed supplier …
[15]
The agreement defines ‘prescribed areas’ to mean each
magisterial district in the Republic of South Africa and
‘prescribed
competitors’ as any entity which:
conducts
the prescribed business in more than 20% (twenty per cent) of the
magisterial districts comprising the prescribed area
in which the
group conduct the prescribed business as at the termination date; or
is
an entity registered outside of the prescribed area which conducts
the prescribed business in the prescribed areas and any subsidiary
thereof…
[16]
The ‘prescribed business ‘ means the business of
the wholesale and\or retail sale of line items carried by
the group
as a determination date. The restraint period is defined to mean a
period of 24 months calculate it from the termination
date, the
latter being defined as the date on which the employees employment by
the company ceases or is terminated for any reason.
[17]
To the extent that Vieira contends that Massmart has failed to
establish the terms of the restraint agreement and a breach
of the
agreement, his contention is based on the definition of ‘prescribed
areas’ read with ‘prescribed competitors’
and the
failure by Massmart to set out in its founding affidavit that the
second, third and fourth respondents conduct business
in more than
20% of the magisterial districts within the Republic of South Africa.
While it is correct that this analysis was not
undertaken in the
founding affidavit, it is common cause that the applicants and JDG
Trading operate throughout the country. In
response to Vieira’s
challenge, by way of reply, the applicants confirm that competition
takes place in more than 20% of
the magisterial districts in the
country and provide evidence of competition throughout the country.
To the extent that this element
of the restraint agreement is
contested, I find that JDG Trading conducts the prescribed business
in more than 20% of the magisterial
districts that comprise the
Republic of South Africa.
[18]
As I have indicated, Vieira does not dispute that JDG Trading’s
stores, Incredible Connection and Hi-Fi Corp, compete
directly with
the second applicant’s stores, Game, Dion Wired and Makro in
respect of both product range and geographical
area. The applicants
have sought to cast the net of competition between the applicants and
the second, third and fourth respondents
wide, but in view of
Vieira’s concession that there is a not insignificant
competitive interface, I need therefore not make
any specific
findings in relation to its nature and extent.
[19]
The primary basis of Vieira’s opposition to the application is
not the absence of any substantial competitive interface
rather than
lack of any usefulness to JDG Trading of any confidential information
to which Vieira has had access during the course
of his employment by
Massmart. Vieira contends that even if he was exposed to the
applicants’ confidential information or
had the opportunity to
develop relationships with the applicants’ customers and
suppliers, he is not in a position to use
this confidential
information or these relationships to advance the business of the JD
Group, JDG Trading or the fourth respondent
or cause harm to the
business of the applicants. Vieira advances this assertion on three
main grounds. First, he contends that
his knowledge of rebates
granted by suppliers is limited to those negotiated at a group or
‘umbrella’ rather than chain
or store level; secondly,
that the businesses of the JDG Trading and the second applicant
differ to such an extent in relation
to turnover and market share
that any confidential information to which he has had access would be
of limited if any value to JDG
Trading; and thirdly, that the
difference in business models (Massmart operates on a decentralised
basis, the JDG Group on a centralised
basis) will render him
incapable of using his knowledge of the applicants trade secrets and
confidential information to the benefit
of the third respondent.
[20]
The applicants’ case, in broad terms, is that a key element in
the competitive edge that it seeks to establish and maintain
is the
effective negotiation of confidential rebates with their suppliers.
What the applicants seek to do is to protect their relationships
and
exclusive contractual arrangements with the suppliers. The present
application thus largely turns on the nature and extent
of the
information to which Vieira admits that he had access during
the course of his employment with Massmart, and the extent
of the
usefulness of that information to the second, third and fourth
respondents.
[21]
I deal first with the issue of supply rebates. It is not disputed
that pricing in the retail industry has two broad components.
The
first is the high-level rebates negotiated with suppliers, referred
to as the ‘back-end’ margin and includes the
rebates
negotiated by Vieira on behalf of Massmart. The other component is
the ‘front-end’ or retail margin, which
applies to the
retail price for which the product is sold. The retail margin is the
margin and pricing negotiated by each of the
chains within the
Massmart group on an individual and independent basis with particular
suppliers. This may include additional
discounts, advertising
budgets, promotions, demonstrations and preferential deals all of
which are negotiated independently by
each of the chains in the
Massmart group. Given that front-end margins change rapidly and
continuously, it would follow that if
this information is
confidential at all, it loses its confidentiality and value within a
short period of time.
[22]
Vieira contends that he was not involved at chain store level and
does not know the relevant front-end margins and is thus
unable to
influence pricing at JDG Trading to make it more competitive with
Massmart. In short, Vieira’s case that even though
he was
responsible for the negotiation of rebates with Massmart’s
suppliers and that he had relationships with suppliers,
the knowledge
that he acquired and the relationships that he forged are of no value
to JDG Trading on account of the macro-level
at which the information
was obtained and its limited use at that level.
[23]
However, the information to which Vieira had access, on his own
version, is not limited to supplier rebates. It is not disputed
that
in his capacity as group general merchandise executive, Vieira was
party to what is described as the general merchandise forum,
a
monthly meeting of senior general merchandising executives across the
group. It is not disputed that the purpose of the forum
amongst other
things is to review the applicant’s performance and
competitiveness in the marketplace, to develop strategies
and
initiatives to outperform the applicants’ competitors and to
review matters relating to programs for joint advertising,
the
introduction of new products and new product categories, business
plans and the determination of milestones and targets and
a review of
competitor activity and plans. In this forum, the attendees also
discuss mandates to the group’s lead negotiator
(in the
majority of cases Vieira), for negotiation with suppliers.
Confidential information, including rebates, growth incentive
rebates, advertising contributions distribution allowances and
settlement terms are discussed at these meetings.
[24]
Vieira does not seriously dispute the purpose of the forum, nor does
he dispute the nature of what was discussed in the forum
or that it
is strategic information at a high level.
[25]
Turning next to Viera’s assertions concerning the different
business models adopted by Massmart and the JD group respectively,
it
is not disputed that if Vieira takes up his position as business
development executive with the JDG group that he will have
a seat on
the centralised executive committee of the third respondent. It
follows that in this capacity, Vieira will be in a position
to have a
material effect on the businesses of JDG Trading and its
subsidiaries. The fact is that the JD group may have a centralised
management structure does not detract from the fact that the JDG
Trading’s stores compete directly and substantially with
the
second applicant’s stores nationwide, that JDG Trading and the
second applicant are both retailers of electronic products
to the
general public, that the third and fourth respondents’ stores
and the second and third applicants’ stores compete
in
electronic products and building materials and that in regard to the
latter, the major suppliers of electronic products and
building
material in South Africa are the same for the third and fourth
respondents in the second and third applicants.
[26]
This must necessarily be viewed against the fact that Vieira
negotiated trading terms with the applicants’ top 41 suppliers
of general merchandise and in conjunction with others, negotiated or
oversaw the negotiations with a further 21 suppliers of general
merchandise. It also ignores the fact that the volume of purchases of
general merchandise from these 62 suppliers constitutes 57.5%
of all
purchases of general merchandise by Massmart in South Africa and the
12 month period ended June 2015. It is axiomatic that
almost all of
the 62 suppliers are also the key suppliers of the third and fourth
respondents.
[27]
The proposition that key suppliers will not entertain granting the
third respondent the same or substantially better trading
terms is
not sustainable having regard to the fact that on the papers, the
applicants are required simply to believe Vieira that
he will not ask
them for the same or substantially the same or better trading terms
than those granted to the applicants, or that
the key suppliers will
refuse to grant the third respondent the same or better trading terms
simply on account of differences in
turnover and market share.
[28]
While it is not disputed that the annual turnover of the second
applicant is some R10 billion per annum and that of JDG Trading
some
R3 billion per annum, JDG Trading has the second largest market
share in electronic products and as such, constitutes
the second
largest customer of key suppliers. That being so, the key supplier
cannot afford not to have a presence in the third
respondent stores
or to lose the goodwill and custom of the third respondent. It would
accordingly be open to Vieira to pressurise
a key supplier to grant
JDG Trading the same or better trading terms. At its most basic
level, the sales executive of a key supplier,
anxious to retain the
goodwill of its second largest customer, would be required to
negotiate with Vieira on the basis that he
or she is fully aware that
Vieira knows the terms agreed by the supplier with the applicants.
[29]
In these circumstances, regardless of size and market share, JDG
Trading stands to gain a negotiating edge as against key suppliers
to
improve its trading terms. Given the volume and value of sales, the
smallest misuse of the applicants’ confidential information
could have ramifications measured in tens of millions of Rands. As
indicated in
BHT
judgment (
supra
), the purpose of a
restraint is precisely that an employer does not have to ‘cross
its fingers’ and trust a restraint
employee not to divulge or
use the trade secrets of his or her employer for the benefit of a new
employer.
[30]
More fundamental though, in my view, is the confidential information
to which Vieira had access by virtue of his responsibility
in running
the general merchandising forum. As mentioned above, on his own
version, the forum reviews mandates and growth hurdles
for suppliers
(additional incentives offered by suppliers for further rebate),
allows chains to share their performance by product
category and
matters of general interest, provides feedback on current projects
and target areas and discusses issues of relevance
to Massmart’s
competitors. This is self-evidently information of a highly
confidential nature and of commercial value to
a competitor.
Objectively viewed, and having regard to the totality of the
information which is available to Vieira and which is
clearly
confidential information of the applicants, it is not unreasonable to
enforce the restraint agreement against him.
[31]
For these reasons, in my view, Vieira has failed to establish that
the information to which he has had access during the course
of his
employment with Massmart (including but not limited to back-end
margins) would be of no commercial value to JDG Trading.
[32]
The third and fourth elements of the test established in
Basson v
Chilwan
(supra) require a balancing of interests and in
particular, a determination of whether the interests of the
applicants outweigh
Vieira’s interest not to be economically
inactive or unproductive, and considerations of public policy. It is
undoubtedly
so that the enforcement of a restraint agreement imposes
a degree of hardship on the party to whom it applies, but this is not
in itself a basis to find that the restraint is unreasonable (see
Branco t/a Mr Cool v Gale
1996 (1) SA 163
(E) at 179 E-F)). It
is not disputed that Vieira left Massmart’s employ voluntarily
and that he is able to remain economically
active and free to utilise
his skills and experience in the public domain provided he does not
do so in competition with Massmart.
In his answering affidavit,
Vieira records a discussion that he had with the divisional chief
executive officer of Masscash Retail
in which he said that employment
with JDG Trading was his ‘first prize’ but that he was
looking at other options including
a private equity opportunity and a
possible franchise opportunity. Vieira specifically records having
said that he would not be
without employment and needed to have a
‘back stop’ option should he be stopped from working for
JDG Trading. I am
not persuaded therefore that Vieira has
demonstrated that he will be economically inactive or unproductive
should the restraint
be enforced.
[33]
Insofar as the period of the restraint is concerned, Vieira contends
that 10 months would be a reasonable period on the assumption
that
Vieira’s knowledge of supply rebates is confined to that
period. As recorded above, this has been challenged by the
applicants
who contend that broadly speaking, most of the trade terms negotiated
by Vieira with suppliers directly have not substantially
changed over
the course of three years and that others have changed only
marginally in that time.
[34]
As I have indicated, in my view, the real protectable interest in
this matter lies not only in the trade terms negotiated with
suppliers but also the confidential information to which Vieira was
privy by virtue of the executive position that he held and
in
particular, his leadership of the general merchandise forum. What is
at issue here is whether the restraint that the applicants
seek to
impose does not go beyond what is reasonably required to protect
their interests in information relating to specific agreements
reached with suppliers and also information relating to Massmart’s
performance and competitiveness in the marketplace, its
strategies
and initiatives to maintain competitive advantage in the marketplace
its business plans and determination of milestones
and targets,
including the introduction of new products and new product
categories. The fact that there has been no change in some
supply
agreements and a marginal change to others does not necessarily imply
that the terms of supply agreements will not change
in future. But
the information to which Vieira has been privy by virtue of his
position is self-evidently information that would
be of commercial
value to the second, third and fourth respondents. This is not
information, it would seem to me, that has value
for a protracted
period and a reasonable restraint in the circumstances would not
extend beyond a period of 12 months. Of some
relevance too, in
relation to the period of the restraint, is the fact that Vieira’s
contract concluded with JDG Trading
includes a six-month restraint
enforceable at the employer’s discretion. It is not disputed
that the business of JDG Trading
competes directly with that of the
applicants. This is an indication, and I put it did no more than
that, that a two-year restraint,
given the nature of the sector, is
on the face of it excessive and unreasonable.
[36]
Vieira has been excluded from Massmart’s business since 2
September 2015, when he was suspended on full pay, and with
effect
from that date, has ceased to be involved in the applicants’
business and exposed to its confidential information
and trade
connections. In the circumstances, in my view, a proper weighing up
of the interests of the parties dictates that the
duration of the
restraint ought to be attenuated and that it should operate for a
period of 12 months from the date on which Vieira
ceased to have
access to any business information, i.e. 2 September 2015.
[37]
Finally, in relation to costs, this court has a broad discretion in
terms of s 162 of the LRA to make orders for costs according
to the
requirements of the law and fairness. The applicants have succeeded
only in part in securing the relief that they seek.
In my view, in
these circumstances, the interests of the lawn fairness are best
served by each party bearing its own costs.
I
make the following order:
1.
The First Respondent is interdicted and
restrained until 2 September 2016 (being 12 months from date on which
the Third Respondent
was suspended) anywhere within the Republic of
South Africa-
1.1 from directly or
indirectly taking up employment with the Third Respondent and the
Fourth Respondent;
1.2 and from directly or
indirectly and whether or not for reward, being interested in, or
engaged in, or concerned with (whether
as proprietor, partner,
director, shareholder, member, employee, consultant, contractor,
financier, agent, representative, assistant,
trustee or beneficiary
of a trust or otherwise) the Third Respondent and the Fourth
Respondent or any company, close corporation,
firm, undertaking or
concern which is a prescribed competitor of the Applicants as defined
in Annexure “
A
” hereto.
2. The
First Respondent is interdicted and restrained until 2 September
2016 anywhere within the Republic
of South Africa –
2.1
from being employed by the Second Respondent and/or any of the Second
Respondent’s other subsidiaries
where such employment would
constitute a breach of the Restraint Agreement, which would include,
but not be limited to, the First
Respondent being a member of, and/or
participating in, in any manner or capacity whatsoever, an executive
committee or any other
forum having a purview of and/or directly or
indirectly exercising influence or control over, the Third and Fourth
Respondents
and the businesses conducted by the Third and Fourth
Respondents;
2.2 and
from becoming involved in any capacity of whatsoever nature (whether
or not for reward, being interested
in, or engaged in, or concerned
with (whether as proprietor, partner, director, shareholder, member,
employee, consultant, contractor,
financier, agent, representative,
assistant, trustee or beneficiary of a trust or otherwise)), with the
Second Respondent and its
subsidiaries where such involvement would
constitute a breach of the Restraint Agreement, which would include,
but not be limited
to, the First Respondent being a member of, and/or
participating in, in any manner or capacity whatsoever, an executive
committee
or any other forum having a purview of and/or directly or
indirectly exercising influence or control over, the Third and Fourth
Respondents and the businesses conducted by the Third and Fourth
Respondents.
3. The
First Respondent is interdicted and restrained until 2 September 2016
anywhere within the Republic
of South Africa, for himself, or for and
on behalf of, any company, close corporation, firm, undertakings or
concern in which he
is directly or indirectly interested or employed,
from encouraging or enticing or inciting or persuading or inducing
any other
employee of the Applicants who was employed whilst the
First Respondent was employed with the Applicants to terminate
his/her employment
with the Applicants or attempt to do so.
4. The
First Respondent is interdicted and restrained until 2 September 2016
anywhere within the Republic of South
Africa from furnishing any
information or advice (whether oral or written) to any prescribed
supplier (as defined in Annexure “A”),
or use any other
means or take any other action which is directly or indirectly
designed, in the ordinary course of events, to
result in any such
prescribed supplier terminating his association with the Applicants
or attempting to do so.
5.
The First Respondent is interdicted and restrained until 2
September 2016 from disclosing any confidential information of the
First,
Second and Third Applicants, such confidential information
being any information to which the First Respondent became privy to
by virtue of his employment with the Applicants, and which would be
of assistance to a competitor to enable such competitor to compete
against the Applicants and which would not ordinarily be known to
such competitor.
ANNEXURE
“A”
DEFINITIONS
OF “PRESCRIBED COMPETITOR” AND “PRESCRIBED
SUPPLIER”
6.
Ex facie
the
Restraint Agreement between the First Applicant and the First
Respondent concluded on 28 June 2002 (“the Restraint
Agreement”)
–
6.1
“
Prescribed Competitor” means
any person or any Entity which –
6.1.1
conducts a Prescribed Business in more than
20% (twenty percent) of the magisterial districts in the Republic of
South Africa in
which the Group conducts a Prescribed Business as at
15 November 2015;
6.1.2
is an Entity registered outside of the
Republic of South Africa which conducts a Prescribed Business in the
Republic of South Africa
and any subsidiary thereof.
6.2
“
Prescribed Supplier” means any
person or any Entity which supplied to the Group more than 2.5% (two
comma five percent) by
value of its stock in trade within the period
of 1 (one) year preceding 15 November 2015.
7.
And where
ex
facie
the Restraint Agreement –
7.1
“
the Company” means, Massmart
Holdings Limited (the First Applicant);
7.2
“
Entity” includes any
association, business, close corporation, company, concern,
enterprise, firm, partnership, person, trust,
undertaking or other
similar entity whether corporate or incorporate;
7.3
“
Group” means collectively the
Company, any partnership in which the Company is a partner, any
company which is a subsidiary
company of the Company and reference to
“the Group” shall embrace each member thereof
individually;
7.4
“
Prescribed Business” means the
business of the wholesale and/or retail sale of line items carried by
the Group as at 15 November
2015.
ANDRÉ
VAN NIEKERK
JUDGE
OF THE LABOUR COURT
APPEARANCES
For
the applicants: Adv. C Whitcutt SC, instructed by Justin Lapin
Attorneys
For
the first respondent: Adv. A Redding, with him Adv. P Bosman,
instructed by Petersen, Hertog & Associates