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[2017] ZALCCT 44
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Aramex South Africa (Pty) Limited v Van Schalkwyk and Another (C516/2017) [2017] ZALCCT 44 (4 October 2017)
IN
THE LABOUR COURT OF SOUTH AFRICA, CAPE TOWN
Not
Reportable
Case
no: C516-2017
In
the matter between:
ARAMEX
SOUTH AFRICA (PTY) LIMITED
Applicant
and
CARLE
VAN SCHALKWYK
First Respondent
WORLD
NET EXPRESS (A DIVISION OF
WORLD NET LOGISTICS (PTY)
LTD)
Second Respondent
Heard:
12 September 2017
Delivered:
4 October 2017
JUDGMENT
TLHOTLHALEMAJE,
J:
Introduction:
[1]
The Applicant (Aramex) approached the Court on an urgent basis to
seek final
relief enforcing certain restraint of
trade, confidentiality and non-solicitation undertakings as furnished
by the First Respondent
(Van Schalkwyk) in terms of a Memorandum of
Agreement between the parties. Aramex seeks to enforce the restraint
for a period of
12 months and anywhere within a 70 kilometres radius
of any of its 17 business premises located throughout the Republic
until 11
May 2018.
Van Schalkwyk opposed the application,
whilst the Second Respondent (World Net Express) filed a notice to
abide.
[2]
Van Schalkwyk, as reiterated during argument had consented to certain
of Aramex’s prayers in the Notice of Motion, and
more
specifically, not to solicit, interfere, or entice or attempt to
entice away from Aramex any customers, and not to divulge
or use
confidential information of Aramex to any third party. Aramex is
nevertheless not content with those concessions or undertakings.
Background:
[3]
Aramex conducts business as an express courier, transport and
logistics company. It transports goods locally and internationally
on
behalf of private clients including companies and individuals. The
industry within which Aramex operates is known to be extremely
competitive, and there is a constant drive amongst competitors to win
large volumes of work and/or repeat business.
[4]
Van Schalkwyk joined Aramex with effect from 30 September 2013 as a
Senior Sales Executive in its Stellenbosch branch. On 9
October 2013,
she had furnished Aramex with restraint and confidentiality
undertakings by signing a Memorandum of Agreement in
its favour. The
Agreement is extensive and contains the standard restraint of trade,
non-solicitation, and confidentiality clauses.
[5]
On 5 May 2017, Van Schalkwyk resigned from Aramex and had on the same
date, accepted an offer of employment from World Net Express
which
she had received on 3 May 2017. It is common cause that that World
Net Express is Aramex’s direct competitor, as it
also provides
express courier, transport and logistics services. World Net Express
operates throughout the Republic, Europe and
South-East Asia, and
services individuals, small and large companies. Services provided by
both World Net Express and Aramex overlap,
and the two entities often
compete for work and tender for the same projects.
Urgency:
[6]
Van Schalkwyk opposed the application on a variety of grounds. Chief
amongst them was that the application should be dismissed
for want of
urgency, as Aramex had failed to set out sufficient reasons for
deviating from the provisions of the Rules of this
Court.
[7]
As to whether the matter is urgent or not must be determined within
the factual background leading to and after Van Schalkwyk’s
departure from Aramex. The application was brought before the Court
on 22 August 2017 following upon the following common cause
facts;
7.1
After Van Schalkwyk had resigned from Aramex and upon accepting
an
offer of employment made by World Net Express, Aramex on 7 May 2017
discovered through an automated ‘data leak prevention
system’
from its international operations based in Amman that on the same day
that Van Schalkwyk resigned, she had copied
confidential files from
her computer to her personal USB external device.
7.2
The information copied included February billings, express
rate
templates, and client contact details (inclusive of 2016/2017 client
list, key clients, decision makers, pricing, rates and
billings per
clients);
7.3
On 8 May 2017, Aramex’s Branch Manager for the Stellenbosch
operations, Andre Cronje, discussed the matter surrounding the
copying of confidential information with Van Schalkwyk. Her response
was that she had deleted the files while cleaning her laptop, and
that her computer port was blocked and she therefore could not
have
downloaded the information on her external USB;
7.4
Cronje on the same date received further information from Amman
that
Van Schalkwyk’s computer was on a ‘level 2’
security setting, and she was thus able to connect any USB to
her
computer, and had in fact copied the confidential files despite her
denials;
7.5
On 10 May 2017, Van Schalkwyk had an exit interview and had
informed
Aramex’s Mianda van Niekerk that she was leaving to take up
employment in the steel industry. She had also stated
that she had
four other offers of employment with a better salary than that
offered by Aramex;
7.6
Van Schalkwyk’s last day of employment with Aramex was
on 11
May 2017. Before she left, she had handed in the USB drive to which
she had downloaded the confidential information, and
Cronje had
deleted all the Aramex files. She had also signed an undertaking to
confirm that all of Aramex’s information had
been deleted and
that she was no longer in possession thereof. She further warranted
that she had not distributed the information
to a third party;
7.7
Aramex had on 28 July 2017 discovered through one of its sales
team
members, Melanie Van Bank that Van Schalkwyk was employed by World
Net Express at its Airport Industria branch, some 33 km
from
Stellenbosch. Van Bank had also reported that she had called one
Derick Boonzaaier, a representative of an entity known as
‘Ossur’
which was Aramex’ existing client, and was informed that Van
Schalkwyk had cold-called ‘Ossur’;
7.8
On 2 August 2017, Aramex’ attorneys of record, Cliffe
Dekker
Hofmeyr (CDH), sent correspondence to Van Schalkwyk, which was also
copied to World Net Express to seek undertakings from
her that she
would comply with her undertakings in terms of the Memorandum of
Agreement. In the letter, she was also advised of
the
misrepresentations she had made, and it was demanded that she comply
with the terms of the restraint agreement, and to with
immediate
effect, terminate her employment with World Net Express;
7.9
Van Schalkwyk’s response on 3 August 2017 through her
attorneys
of record, Burger Potgieter Attorneys, was to admit that she was
indeed employed by World Net Express. She had however
denied that she
had made any misrepresentations during her exit interview, as the
offer from Pacific Steel was real together with
other offers from
courier companies. In her response, she also reiterated her
undertaking not to use or disclose or divulge to
third parties, any
of Aramex’s trade secrets, and warranted that she was not in
possession of any trade secrets, written
instructions, drawings,
notes, memoranda or records related to trade secrets. She had further
stated that her new role in World
Net Express was essentially to
maintain relations with existing clients and to service areas other
than those serviced by her during
her employ with Aramex. She also
disputed that the restraint agreement was enforceable;
7.10
According to Chantal Adamstein, the deponent to the Founding
Affidavit and
Aramex’s Regional Human Resources Executive, a
decision was taken on 8 August 2017 to enforce the restraint
agreement, and
CDH was accordingly instructed to secure counsel.
Counsel was only available for consultation on 14 August 2017 and
papers were
then prepared for serving and filing.
[8]
Aramex in the light of the above contended that it had acted with the
necessary diligence and expediency in bringing this application,
and
had taken active steps once it was discovered that Van Schalkwyk had
joined the competition in breach of her restraint undertakings.
It
was further submitted that matters such as these were by their very
nature urgent, and that the undertakings given by Van Schalkwyk
were
of limited duration. To this end, it was submitted that if this
application was to be brought in the ordinary course, Aramex
would
not be able to obtain substantial redress, and that by the time the
matter is heard, the undertakings would have expired
and irreparable
harm would have been suffered.
[9]
Van Schalkwyk contended that on Aramex’s own version, it had
learned of her employment with World Net Express on 28 July
2017, and
had received her undertakings on 3 August 2017. She submitted that
the application was only launched some three weeks
later on 22 August
2017, and she was given a short period within which to respond. She
denied that the application was urgent,
and contended that the
undertakings she had made dispensed with any alleged urgency in its
entirety.
[10]
The principles surrounding
urgency are fairly-well established. An applicant seeking urgent
relief as contemplated in Rule 8 of
the Rules of this Court must
adequately and in detail, set out in the founding affidavit, the
reasons for the urgency, the circumstances
which render the matter
urgent, and the reasons why substantial redress cannot be obtained at
a hearing in due cause. It therefore
follows that where the Court is
not satisfied that sufficient reasons exists for the matter to be
treated as urgent, the application
ought to be struck off from the
roll on that ground alone
[1]
.
[11]
Furthermore, where it is found
that the urgency claimed is ultimately self-created, the Court should
refuse to grant relief
[2]
.
It has also been held that disputes pertaining to enforcement of
restraint undertakings are by their very nature urgent
[3]
.
Even if this might be the case, the Court must be satisfied that the
requirements set out in Rule 8 have been complied with.
[12]
One of the factors to be considered in determining whether a matter
should be accorded any urgent attention is the haste with
which a
party approached the Court. In this case, Aramex contended that it
took 11 court days in view of the timeline of events
as summarised
above.
[13]
Having had regard to the founding affidavit, and in particular, the
timeline of events as summarised above, I am satisfied
that the
period of delay complained of by Van Schalkwyk is not egregious. I am
further satisfied that the application has properly
set out reasons
why the matter should be treated as urgent, and has also made out a
case to justify the extent of departure from
the ordinary time
periods set out in the Rule 8. I am also satisfied that Van Schalkwyk
cannot complain of not being granted adequate
time to respond to the
allegations contained in the application, more specifically since she
had filed a substantive answering
affidavit, and was further granted
leave by the Court to file a further answering affidavit. She
therefore has no cause to claim
that she has been prejudiced in any
manner.
[14]
Crucially however is the correspondence between the parties’
attorneys of record in securing undertakings from Van Schalkwyk
and
her responses thereto. Taking into account the events that took place
between her resignation and departure from Aramex, it
would be remiss
of the Court not to treat the matter as urgent in view of the
irreparable harm that Aramex may suffer as a result.
The undertakings
she had made were obviously of little comfort to Aramex as shall
further be illustrated in this judgment, and
Aramex was clearly
within its rights to launch this application at the time that it did.
There is therefore no basis for any conclusion
to be made that the
urgency claimed by Aramex is self-created.
The
restraint of trade agreement and breach:
[15]
Aramex seeks final relief, and
it is trite that it must
satisfy
three requirements, viz, a clear right; secondly, an interference
with that right actually committed or reasonably apprehended;
and,
thirdly, the absence of suitable alternative remedy
[4]
.
[16]
Aramex’s right is grounded on the existence
of a valid restraint of trade agreement. It is trite that a party
that seeks to
enforce a contract in restraint of trade is required to
invoke the restraint agreement and prove a breach thereof. In her
answering
affidavit, Van Schalkwyk conceded that she had signed the
agreement in October 2013, but contended that she was compelled to do
so as she was still new in her job. She alleged that she signed the
agreement as she did not want to ‘cause any ruptions’.
[17]
It is not clear as to whether Van Schalkwyk sought
to disavow the agreement or not, as in the submissions made on her
behalf, it
was conceded that she admitted the agreement. Even if she
sought to disavow the agreement, in my view, this was a half-hearted
attempt at doing so. Furthermore, it is trite that the principles of
caveat subscripto
applies in such cases, particularly since the nature of that
‘compulsion’, or alleged undue influence (if any) remains
unknown. To this end, I am satisfied that there is a valid restraint
of trade between the parties.
[18]
To the extent that it was found that there is a
valid restraint of trade between the parties, it is further common
cause that Van
Schalkwyk has taken up employment with World Net
Express, and that she is based
at its Airport Industria
premises, some 33 km from Stellenbosch
. Van
Schalkwyk had conceded that that the two entities were competitors,
and I am satisfied that Aramex has
discharged its onus in
demonstrating a competitive interface between it and World Net
Express.
[19]
Van Schalkwyk however contended that the division
she was employed in by World Net Express did not offer warehousing or
freight
solutions. I am however not convinced that the mere fact that
Van Schalkwyk works in a particular division makes World Net Express
less of a competitor. By
taking up employment with World Net
Express,
coupled with the fact that she is based
33 km from Stellenbosch, Van Schalkwyk is clearly in direct breach of
clause 4 of the Memorandum
of Agreement, which provide that;
‘
You
undertake and warrant in favour of the Company that you will not,
during your employment with the company and for a period of
12
(TWELVE) calendar months after the termination thereof for whatsoever
reason,
anywhere
within, a 70 kilometre radius of any business premises of the
Company, including but not limited to the premises of your
employment
,
be directly or indirectly interested, engaged, concerned, associated
with or employed whether as proprietor, partner, director,
shareholder, employee, consultant, contractor, financier, principal
agent, representative, assistant, adviser, administrator or
otherwise
and whether for reward or not in any company, firm, business
undertaking, concern or other association of any
nature
which furnishes or renders, directly or indirectly, any form of
service as set out in clause 2.1 above
[5]
’
[20]
In the light
of the above conclusions, Van Schalkwyk therefore must discharge the
onus demonstrating on a balance of probabilities
that the restraint
is unenforceable as it is unreasonable and/or contrary to public
policy
[6]
.
At most, she must demonstrate that the
restraint
in question does not seek to protect a legally recognisable interest
of Aramex in any manner, and that it merely seeks
to limit
competition, or at worst
[7]
,
it goes beyond the terms intended or agreed to by the parties
[8]
.
[21]
The
enquiry into the reasonableness of the restraint is essentially a
value judgment that encompasses a consideration of two policies,
namely the duty on parties to comply with their contractual
obligations and the right to freely choose and practice a trade,
occupation
or profession
[9]
.
Central to an enquiry into the reasonableness of the restraint are
four interrelated questions
as
identified in
Basson
v Chilwan and others
[10]
,
viz;
i.
Does
the one party have an interest that deserves protection at the
termination of the employment?
ii.
If
so, is that interest threatened/prejudiced by the other party?
iii.
Does
such interest weight qualitatively and quantitatively against the
interest of the other party not to be economically inactive
and
unproductive?
iv.
Is
there an aspect of public policy having nothing to do with the
relationship between the parties, which requires that the restraint
be maintained or rejected? Thus, where the interest of the party
sought to be restrained outweighs the interest to be protected,
the
restraint is unreasonable and consequently unenforceable.
Protectable proprietary interests:
[22]
Regarding
the first leg of the enquiry, it is now accepted that protectable
interests worthy of protection are of two kinds. The
first relates to
the ‘trade connections’ of the business, which
essentially entails the goodwill of the business encompassing
relationships with customers, potential customers, suppliers and
others
[11]
.
The second relates to ‘trade secrets’ of the company,
which involves all confidential matters which are useful for
the
carrying on of the business and which could be useful to a
competitor
[12]
.
To the extent that Van
Schalkwyk contends that the restraint is unreasonable, it is upon her
to
establish
that she had no access to confidential information and further that
she never acquired any significant personal knowledge
of, or
influence over Aramex’s customers whilst in its employ.
[23]
As
further stated in
Experian
,
it is sufficient if Aramex can show that trade connections through
customer contact exists and that they can be exploited if Van
Schalkwyk were employed by World Net Express, a competitor. Once that
conclusion was reached and it is demonstrated that World
Net Express
is a competitor, the risk of harm to Aramex, if Van Schalkwyk were to
take up employment, becomes apparent
[13]
.
[24]
Principal amongst Van Schalkwyk’s defences was that Aramex did
not have a protectable interest; that the restraint provision
was not
enforceable, alternatively that it is not enforceable to the extent
alleged by Aramex as it is too wide. She further contended
that she
had not disclosed any trade secrets or confidential information of
Aramex, and that she had already provided undertakings
in respect of
the non-solicitation and confidentiality clauses.
[25]
Insofar as the requirements of final relief are concerned, Van
Schalkwyk further contended that Aramex has not established
a clear
right nor an injury actually committed or reasonably apprehended, and
that even if a clear right can be shown, her undertakings
dispose of
any reasonable apprehension of irreparable harm.
[26]
As to whether Aramex has interests worthy of protection needs to be
considered within the context of Van Schalkwyk’s
duties whilst
still employed by it. She did not seriously dispute the fact that in
her role as Senior Sales Executive at Aramex,
her duties entailed the
daily scheduling of new business appointments; client visits; direct
sales of fully fledged courier services
to clients; cold calling;
achieving individual sales targets set in respect of new business,
generating new sales leads and acquiring
new customers, selling
Aramex’s full supply chain products; establishing customer
needs, developing and expanding Aramex’s
customer base;
uploading customer contact details onto Aramex’s systems;
dealing with clients’ and elevated queries;
assisting with
quotations; administrative duties; liaising with potential
international clients and local branches; generating
new sales;
securing new business; preparation and presentation of proposals to
new clients; liaising between Aramex and customers;
and negotiating
rates with customers. She had also in the course of her duties,
attended sales and marketing meetings, where both
the national and
regional sales strategies were discussed.
[27]
Van Schalkwyk conceded that she performed some of the duties outlined
above, but contended that some of those duties were aimed
exclusively
at potentially new clients, and not any of Aramex’s existing
clientele, which she had no relationships with.
Confidential
Information:
[28]
Aramex’s contention was that Van Schalkwyk during her
employment with it enjoyed access to its centralised computer server
and the files and confidential information contained therein; access
to client mandates incorporating details of rates, credit
terms,
cancellation clauses, discounts, terms of engagement and details
proprietary to the type and frequency of services that
each client
used; Aramex’s regional and national sales strategies around
both existing and new customers regarding the retention
of such
customers and the approach being adopted to secure new business;
information concerning customers’ daily, monthly
and annual
spend; contact information and details of key clients and decision
makers. Aramex further contended that contrary to
Van Schalkwyk’s
contention, the above information was unknown to competitors, and was
made known to her in the context of
a confidential relationship,
which remained protectable.
[29]
Van Schalkwyk’s contention was that to constitute protectable
confidential information, such information must be treated
as
confidential by Aramex, in the sense that it should have been
restricted to a limited class of employees. She contended that
this
was not the case in this matter as Aramex had the pricing structures
of its competitors, whilst World Net Express had Aramex’s
pricing structure and of other competitors prior to her employment
with Aramex.
[30]
In her view, the information alleged by Aramex to be confidential was
in any event within the public domain and thus not protectable.
In
this regard, she contended that any person can simply contact Aramex
to request a copy of its credit application form which
will disclose
all information in respect of credit terms, cancellation clauses and
the like. She further argued that there was
no evidence to suggest
that the information of Aramex, or the trade secrets or pricing model
was unique to it; and that even if
it were to be found that she had
been privy to any of Aramex’s confidential information, she had
already undertaken and confirmed
in writing that she did not have any
information confidential or proprietary to Aramex in her possession,
that she would not make
use of any such information, and that she
will not disclose such information to third parties. In her view, the
attempt to enforce
the restraint of trade provisions over and above
her undertakings she had already given was superfluous, moot and
extended beyond
what was required to protect any protectable
interests Aramex may have.
[31]
The very essence of
enforcement of any restraint of trade agreement is to prevent the use
of confidential information by a
former employee to the detriment of
the ex-employer. For information to be regarded as confidential, it
must
be
objectively established that it could reasonably be useful to, and
enable a competitor to gain an advantage over the ex-employer
[14]
,
and
it is therefore not
necessary to find that the ex-employee did or would actually use
trade secrets and confidential information
in his new employment, but
that is was sufficient if
he
could do so
[15]
.
[32]
In this case, it should be accepted that Van Schalkwyk was indeed
exposed to the information as outlined by Aramex. She had
conceded
that she had access to Aramex’s centralised computer server
which contained client contact information. Her contention
however
was that having such access was of little use unless one had a strong
trade connection or rapport with clients. This however
does not in my
view, derogate from the invariable conclusion that she had access to
the information in question, which could prove
to be useful to a
competitor.
[33]
By virtue of the provisions of
clause 2.2 of the Memorandum of Agreement, Van Schalkwyk had
consented to becoming possessed of Aramex’s
trade secrets as
outlined in clause 1, and she had made certain undertakings in that
regard. It is therefore not sufficient for
her to simply allege that
the information in question is not confidential. The fact of the
matter is that confidentiality is relative,
and she had acquired that
information in the course of her confidential employment relationship
with Aramex. The fact that such
information might have been in the
public domain does not make it less confidential
[16]
.
It remains protectable.
[34]
It has also been held that for
information to be regarded as confidential and thus protectable, it
must be capable of application
in trade or industry, must be useful,
and be of economic value to the person seeking to protect it.
[17]
There can be no doubt that the information in question given the
competitive nature of the courier industry is indeed useful and
applicable in that industry. The high watermark of Van Schalkwyk’s
defence was that any perceived prejudice or threats to
Aramex’s
interests is covered by her undertakings; that she had no further
information within her knowledge that can prejudice
Aramex by her
employment with World net Express; and that there was nothing unique
about the information, particularly Aramex’s
pricing model.
[35]
It is further my view
that the circumstances of this case dictate that an enquiry into
whether the information in question was capable
of application in the
industry, or whether it had any economic value, need not go beyond
the facts surrounding Van Schalkwyk’s
resignation from Aramex
and her subsequent undertakings. This is also in line with the
principle that
the
reasonableness of the restraint must be determined with reference to
the circumstances at the time the restraint is sought to
be
enforced
[18]
.
[36]
On the common cause facts, it
is accepted that Van Schalkwyk handed in her resignation on the same
date that she accepted an offer
of employment from World Net Express.
In her resignation letter
[19]
,
she had specifically mentioned that she was leaving Aramex to pursue
other career opportunities outside of the industry and to
grow
further in her career.
Prima
facie
, Aramex had no reason
to believe at the time of the resignation that there might be a
breach of restraint undertakings.
[37]
More concerning however is that on the date of her resignation, she
had downloaded certain confidential information that appears
to be
clearly of great importance to her. One can only conclude that such
information, would prove to be beneficial to her in her
new
employment, and be beneficial to World Net Express. It took about a
week for that information to be retrieved from her private
USB and
for it to be erased from it. Her contention therefore that she no
longer has that information or does not intend to use
it at some
point during her employment with World Net Express is of little
comfort to Aramex, specifically since it is not known
what was done
with that information between 5 and 11 May 2017
[38]
Furthermore, Van Schalkwyk’s other conduct including a
misrepresentation in her resignation letter that she intended
to
pursue her career outside of the industry, when in fact she had
already accepted an offer of employment from World Net Express;
her
failure to disclose in her exit interview that she had already
accepted that offer and her misrepresentation that she was interested
in the steel industry further makes any undertakings made by her to
be treated with scepticism. Furthermore, she had denied when
confronted by Cronje that she had indeed downloaded the information
in question, when it was ultimately established that she had
in fact
done so.
[39]
Even more worrisome for Aramex is that subsequent to Van Schalkwyk
having left, it was discovered that a white file containing
the
company profiles of customers she was looking to canvass for
business, notes of meetings she had with customers and contact
details, was missing from the office. Her denials that she took the
file need to be assessed within the overall context of her
conduct
already elaborated upon.
[40]
In the light of Van Schalkwyk’s conduct,
this
is the type of case where the undertakings given by her not to
disclose any of Aramex’s confidential information she
might
have acquired in the course of her employment, cannot be regarded as
a sufficient safeguard, in the light of the apparent
commercial
threat the potential disclosure of such information to Aramex might
hold. Aramex is correct in being sceptical of Van
Schalkwyk’s
bona fides
flowing from her conduct and outright misrepresentations she had
made. She had copied the information for one specific purpose,
which
was to assist her in her new role in World Net Express, which on her
limited concessions, would have been to focus on new
clients and
business development. In the absence of any justifiable excuse for
her conduct, there is clearly no reason to believe
why that
information cannot be viewed as confidential, and therefore
protectable.
In summary, her undertakings are not worth the
paper they are written on
.
[41]
In
any event, to the extent that Van Schalkwyk wanted to dispute that
the information copied to her USB was not confidential, she
had in
her own voluntary undertaking made on 11 May 2017
[20]
,
confirmed that she had indeed transferred Company confidential and
proprietary data (Company Data) to an external data storage
device
(external hard drive) during her employment with the company, while
aware that the act in question was contrary to the law
and to her
employment contract. In my view, that confirmation disposes of any
doubt about the confidential nature of the information
in question.
Customer
Connections:
[42]
Customer connections
are
protectable provided it is established on the facts, that the
attachment between the ex-employee and the ex-employer’s
customers, was of such a nature that the ex-employee would be able to
induce those customers to follow him or her to the new employer
[21]
.
In placing emphasis on the issue of attachment or relationships, the
Court in
Rawlins
and Another v Caravantruck Ltd,
held
that;
“
In
Morris
(Herbert) Ltd v Saxelby
[1916]
1 AC 688
(HL) at 709 it was said that the relationship must be such
that the employee acquires 'such personal knowledge of and influence
over the customers of his employer . . . as would enable him (the
servant or apprentice), if competition were allowed, to take
advantage of his employer's trade connection…This statement
has been applied in our Courts (for example, by Eksteen J in
Recycling
Industries (Pty) Ltd v Mohammed and Another
1981
(3) SA 250
(E) at 256C-F). Whether the criteria referred to are
satisfied is essentially a question of fact in each case, and in
many, one
of degree. Much will depend on the duties of the employee;
his personality; the frequency and duration of contact between him
and
the customers; where such contact takes place; what knowledge he
gains of their requirements and business; the general nature of
their
relationship (including whether an attachment is formed between them,
the extent to which customers rely on the employee
and how personal
their association is); how competitive the rival businesses are; in
the case of a salesman, the type of product
being sold; and whether
there is evidence that customers were lost after the employee left
(Heydon
(op cit
at
108-120); and see also
Drewtons
(Pty) Ltd v Carlie
1981
(4) SA 305
(C) at 307G-H and 314C and G)”
[43]
As further
stated in
Experian
,
it is sufficient if the ex-employer can show that trade connections
through customer contact exists and that they can be exploited
if the
ex-employee were to be employed by the new employer.
[44]
Aramex’s contention was that Van
Schalkwyk, by virtue of her position, was during her employment with
it, exposed to and had
developed relationships with all new and
existing clients, and that those relationships are proprietary to it
and protectable.
Aramex mentioned Ossur as an example of the risk of
irreparable harm being caused to it if Van Schalkwyk were to exploit
the relationships
in question, whether directly or indirectly. Aramex
had further pointed out that Van Schalkwyk had conceded that she had
a friendly
relationship with at least three customers (Fairview Wine
Estate, Cyber Cellar and Hermanuspieterfontein Wines) who are in the
wine industry, and had forged relationships with nine other customers
as evinced by her social media (Facebook), who are also her
‘friends’
on that platform.
[45]
Van Schalkwyk however disputed that she had
any relationships with existing clients, particularly since her main
function was to
identify new customers, and that as soon as she had
signed up a customer, she would pass it on to one of the business
development
managers. She submitted that her duties did not involve
entertaining, maintaining or building client relations with existing
customers,
but rather to generate new clients. She contended that she
had no influence over or rapport with any particular client of the
applicant
which she could leverage to solicit custom away from
Aramex. The three customers she had friendly relations with were in
the wine
industry based in Boland and Overberg, and World Net Express
did not service them, and she had not formed a relationship strong
enough with them to take their custom elsewhere.
[46]
As already indicated elsewhere in this judgment, Van Schalkwyk was
granted leave to file a further answering affidavit. Despite
being
afforded an opportunity to deal with new issues arising from Aramex’s
replying affidavit, she failed to respond to
the latter’s
assertion that contrary to her contentions, she had indeed built up a
rapport with customers with whom she dealt.
In this regard, it was
Aramex’s assertion that whilst the customers secured by Van
Schalkwyk would have a customer relations
manager assigned to them,
her personality was such that she remained involved with those
customers and continued to look after
them. This omission in my view
is fatal, as it was Aramex’s case that in the course of her
employment, Van Schalkwyk had
built and maintained such
relationships.
[47]
It
is trite that once it is established that the new employer is a
competitor, the risk of harm to the new employer, if the ex-employee
were to take up employment, becomes apparent
[22]
.
This principle is equally apt in this case.
Aramex
also made two pertinent submissions which I am of the view disposes
of the issue surrounding Van Schalkwyk’s relationship
with the
three customer she had conceded she enjoyed a friendly relationship
with. The first is that World Net Express did not
oppose this
application and therefore, had not confirmed that it did not service
the wine industry. Secondly, World Net Express
has not made any
undertaking that it will not seek customers in the wine industry. The
mere fact that it chose to abide by the
Court’s decision cannot
by any account be deemed to any acquiescence to any undertaking made
by Van Schalkwyk.
[48]
The significance of these omissions is that in the light of Van
Schalkwyk’s own version, she had built a relationship
with the
customers in the wine industry. The fact that World Net Express does
not service the wine industry is of no consequence,
particularly
since her new tasks would involve attracting and maintaining new
clients. Given the nature of the industry Aramex
operates in, all
that is needed amongst other things is indeed a ‘friendly
relationship’ or ‘getting on well’
(as Van
Schalkwyk described it), with existing or potential customers to lure
them away.
[49]
Other than the above, the
conclusions reached elsewhere in this judgment pertaining to Van
Schalkwyk’s undertakings are equally
applicable in regard to
the trade connections she had established whilst in the employ of
Aramex. In the light of Van Schalkwyk’s
conduct already
elaborated upon, it is not for Aramex to fold its arms and trust that
Van Schalkwyk will not exploit those trade
connections for the
benefit of World Net Express, particularly in the light of her
already being in breach of the restraint by
joining it
[23]
.
Furthermore, the undertaking, irrespective of how sincere Van
Schalkwyk wishes to portray it is unpoliceable, specifically since
World Net Express appears to have distanced itself from matter.
Weighing
of interests:
[50]
The issue for consideration is how Aramex’s interests weighs
qualitatively and quantitatively against those of Van Schalkwyk
to be
economically active and productive. Her contention was that she is
from the Northern Suburbs in Western Cape where her family
is also
based, and that she had been in sales and client liaison all her
working life. She further submitted that the enforcement
of the
restraint will preclude her from working in the industry she had most
recently worked in, and that the only job offers she
had received
were within the courier industry. She further contended that she
would not harm Aramex’s interests as she would
not be involved
with servicing the wine industry or in the Stellenbosch area.
[51]
This issue of how Aramex’s interests weighs qualitatively and
quantitatively against those of Van Schalkwyk to be economically
active and productive needs to be considered against the following
factors;
a)
Van Schalkwyk left Aramex’s employ on her own accord. In her
resignation
letter, she had indicated that her future employment
would be outside the courier industry. In her exit interview, she
also indicated
that she was taking up employment in the steel
industry.
b)
She had joined Aramex’s direct competitor, in circumstances
where she had
not only lied in her resignation letter and exit
interview about where she was going to be employed, but had also for
what appeared
to be nefarious reasons, downloaded Aramex’s
confidential information on the same date that she had resigned and
then accepted
an offer from World Net Express.
c)
Van Schalkwyk in her answering affidavit had in elaborate terms,
outlined her
academic background and various job experiences. She has
extensive skills in public relations (especially in the wine
industry),
sourcing new clients, brand building, product marketing,
administration, new business development, client liaison, management
of
stock, rental services etc
[52]
In the light of the above
factors, there is no basis for a conclusion to be reached that Van
Schalkwyk is not employable outside
of the courier industry, and I
did not understand her case to be that the skills and expertise she
had acquired over the years
were industry specific or not
transferrable. Furthermore, on her own version as evident from her
attorneys of record response
[24]
to CDH’s letter of demand, she had stated that at the time of
her exit interview, she had indeed indicated her intention
to take up
employment with an entity known as Pacific Steele within the steel
industry. She therefore
remains
free to be economically active outside the business of Aramex and she
could utilise her skills and expertise in the public
domain and in
the open labour market, provided that she does not do so in
competition with Aramex.
[53]
Further in the light of the factors above, I am satisfied that Aramex
has demonstrated that there is more than a likelihood
that Van
Schalkwyk can and will economically exploit its proprietary
interests. Aramex’s interests in the light of the common
cause
background facts far outweigh those of Van Schalkwyk, particularly
since the enforcement of the restraint provisions would
not in any
event preclude her from being economically active in any industry
other than the courier industry, including in her
home base.
Is
the duration and area covered by the restraint not reasonable?
[54]
Van Schalkwyk’s contention was that a case had not been made
out as to why the restraint should be for a period of 12
months, and
that the mere fact that Aramex serviced its clients throughout South
Africa did not entitle it to prevent her from
plying her trade
effectively throughout the country with the imposition of the 70-km
radius.
[55]
As to whether the area and duration of the restraint is reasonable
must first be determined within the provisions of clause
5 of the
Memorandum of Agreement, in terms of which Van Schalkwyk had
acknowledged and agreed that the restrictions and the restraints
contained therein were reasonable and fair. She cannot now in the
face of an enforcement complain that the restrictions are unfair
or
unreasonable.
[56]
A second consideration is that
Aramex services its
clients across South Africa and is seeking to protect its proprietary
interests in relation to its economic
activity. I have no reason to
doubt its contention that Van Schalkwyk was privy to its regional and
national sales strategies,
including rates applicable throughout the
country, which information could prove to be useful to a competitor
such as World Net
Express. I am of the view that the geographical
area covered by the restraint is not too wide as alleged by Van
Schalkwyk, and
in the light of the interests that Aramex seeks to
protect, this cannot be achieved if Van Schalkwyk is allowed to work
for World
Net Express or any other competitor anywhere within 70 km
radius of Aramex’s 17 branches country wide.
[57]
As further correctly pointed out on behalf of Aramex, Van Schalkwyk’s
reasons for alleging that the area and duration
of the restraint is
unreasonable are purely self-serving. These reasons cannot in my view
prevail in circumstances where she had
voluntarily resigned from
Aramex for a more lucrative job offer, displayed her willingness to
not only blatantly join the competition
when she was aware of her
restraint undertakings, but also where in order to give herself a
head-start in her new job, she had
unlawfully copied Aramex’s
confidential information.
[58]
The Courts, given the balance necessary to be created in restraint of
trade disputes between competing interests, should in
my view, be
reluctant to be sympathetic to an employee in Van Schalkwyk’s
case, whose conduct surrounding her resignation
fell short of basic
decency and candour towards her ex-employer.
Conclusions:
[59]
To summarise then,
it is concluded that there
is a valid Memorandum of Agreement between the parties, in terms of
which Van Schalkwyk made certain
undertakings. That agreement is
enforceable, and Van Schalkwyk has by taking up employment with World
Net Express, breached its
provisions. Aramex has demonstrated that it
has proprietary interests worth protecting, and it follows that
Aramex will suffer
irreparable harm if the agreement is not enforced.
The potential harm that can be caused by Van Schalkwyk taking up
employment
with World Net Express given the circumstances of this
case cannot be easily remedied by a claim for damages in due course.
To
this end, it is thus concluded that Aramex
has
satisfied the requirements of the relief it seeks.
Costs:
[60]
Aramex sought a cost order to the extent that it was successful. The
provisions of section 162 of the Labour Relations Act
enjoin the
Court to take into account the requirements of law and fairness when
making an award of costs. Van Schalkwyk’s
conduct leading to
and after her resignation from Aramex deserves rebuke from this
court, and for her to have opposed this application
on the basis that
she had made undertakings was clearly ill-conceived. Those
undertakings are clearly unpoliceable, and it could
not have been
expected of Aramex to trust her
bona fides
in the light of her
conduct after her resignation.
[61]
Guidance however is sought from
the approach set out in
Trevlyn
Ball v Bambalela Bolts (Pty) Ltd
[25]
,
in which the Labour Appeal
Court held that in awarding costs in disputes involving enforcement
of restraint of trade, the Court
should be mindful of the fact that
such disputes invariably impacts on the provisions of section 22 of
the Constitution of the
Republic, and litigants should not be
deterred
from defending or prosecuting
bona
fide
actions for fear of adverse costs orders. Inasmuch as one should be
mindful of these constraints, where the circumstances of the
case
such as this one, are such that the conduct of a party was
reprehensible, and thus compelled another to approach the Court,
there is no reason in fairness why costs should not be awarded. In
any event, it is trite that
purpose
of awarding costs is to indemnify the successful litigant for the
expense he or she has been put through by having been
unjustly
compelled to initiate or defend litigation. To this end, and taking
into account that
the
restraint of trade will be enforced in its entirety, I am
nevertheless
satisfied
that fairness dictates that Van Schalkwyk be burdened with some and
not all of the costs incurred by Aramex.
Order:
[62]
In the premises, the following order is made;
1.
The forms and service provided for in the Rules of this Court are
dispensed with,
and the matter is dealt with as an urgent
application.
2.
The First Respondent is interdicted and restrained for (12) twelve
months and
until 11 May 2018, and anywhere within a (70) seventy
kilometre radius of any business premises of the Applicant (namely
its 17
branch offices located as follows: Johannesburg, Pretoria,
Nelspruit, the Vaal Triangle, Pietermaritzburg, Rustenburg, Durban,
Richards Bay, South Coast, Bloemfontein, Kimberley, Polokwane, East
London, Port Elizabeth, George, Stellenbosch and Milnerton –
Cape Town), including but not limited to the premises of the First
Respondent’s employment with the Applicant, namely that
of
Stellenbosch, from directly or indirectly,
2.1
being employed by the Second Respondent;
2.2
rendering or attempting to do so, any services which were rendered by
the Applicant
during the First Respondent’s employment with the
Applicant, to or for the benefit of any customer of the Applicant;
2.3
soliciting, interfering with, or enticing or attempting to entice
away from
the Applicant any such customer; and
2.4
being interested, engaged, concerned, associated with or employed
whether as
proprietor, director, shareholder, employee,
consultant, contractor, financier, principal, agent, representative,
assistant, adviser,
administrator or otherwise, and whether for
reward or not in any company, firm, business undertaking, concern or
other association
of any nature which furnishes or renders, directly
or indirectly, any form of services that involve full supply chain
logistics
services that include: clearing and forwarding,
warehousing, packaging, mailroom and international and domestic
collection and
delivery of packages and parcels.
3.
The First Respondent is interdicted and restrained from divulging or
using the
confidential information of the Applicant to any third
party including the Second Respondent.
4.
The First Respondent is ordered to pay the costs of the Applicant,
excluding
the costs of the employment Counsel.
____________________
E.
Tlhotlhalemaje
Judge
of the Labour Court of South Africa
Appearances:
For
the Applicant:
Adv. C. De Witt
Instructed
by:
Cliffe Dekker Hofmeyr INC
For
the First Respondent:
Adv. MA McChesney
Instructed
by:
Burger Potgieter Attorneys
[1]
See
Commissioner For the
South African Revenue Services v Hawker Air Services (Pty) Ltd and
Another
(supra) where it
was held that:
“
Urgency is a reason that
may justify deviation from the times and forms the rules prescribe.
It relates to form, not substance,
and is not a prerequisite to a
claim for substantive relief. Where an application is brought on the
basis of urgency, the rules
of court permit a court (or a judge in
chambers) to dispense with the forms and service usually required,
and to dispose of it
‘as to it seems meet’ (Rule 6(12)
(a)). This in effect permits an urgent applicant, subject to the
court’s
control, to forge its own rules (See Republikeinses
Publikasies (Edms) Bpk v Afrikaanse Pers Publikasies (Edms) Bpk
1972(1) SA
773 (A) 782A-783H) which must ‘as far as
practicable be in accordance with’ the rules). Where the
application lacks
the requisite element or degree of urgency, the
court can for that reason decline to exercise its powers under Rule
6(12) (a).
The matter is then not properly on the court’s
roll, and it declines to hear it. The appropriate order is generally
to
strike the application from the roll. This enables the applicant
to set the matter down again, on proper notice and compliance”.
[2]
See
Jiba v Minister:
Department of Justice and Constitutional Development and Others
2010) 31 ILJ 112
at para
18, where it was held that;
“
Rule 8 of the rules of this
court requires a party seeking urgent relief to set out the reasons
for urgency, and the degree to
which the ordinary applicable rules
should be relaxed is dependent on the degree of urgency. It is
equally trite that an applicant
is not entitled to rely on urgency
that is self-created when seeking deviation from the rules”.
[3]
See
Mozart
Ice Cream Classic Franchises (Pty) Ltd v Davidoff and Another
2009
(3) SA 78
(C)
at
88J
[4]
Setlogelo v Setlogelo
2014
AD 221
at 227
[5]
Clause 2.1
provides that;
‘
The
Company conducts the business of providing full supply chain
services that include; clearing and forwarding, warehousing,
packaging, mailroom and the international and domestic collection
and delivery of packages and parcels’
[6]
Magna Alloys and Research
SA (Pty) Ltd v Ellis
1994 (4) SA 574
(A).
See
also
Experian South Africa
(Pty) Ltd v Heyns and Another
[2013] (1) SA 135
(GSJ)
at
para 14
, where it was held
that;
‘
The position in our law is,
therefore, that a party seeking to enforce a contract in restraint
of trade is required only to invoke
the restraint agreement and
prove a breach thereof. Thereupon, a party who seeks to avoid the
restraint, bears the onus to demonstrate
on a balance of
probabilities, that the restraint agreement is unenforceable because
it is unreasonable’.
[7]
Magna Alloys and Research
(SA) (Pty) Ltd v Ellis
at
893C-G and 897H – 898D
[8]
See
Ball v Bambalela Bolts
(Pty) Ltd and Another (2013) 34 ILJ 2821 (LAC)
[9]
See
Labournet (Pty) Ltd v Jankielsohn and Another
[2017] 5 BLLR 466
(LAC)
at
para 41;
Sunshine
Records (Pty) Ltd v Frohling and others
1990 (4) SA 782
(A)
at 794C-E
[10]
[1993] ZASCA 61
;
[1993] (3) SA 742
(A) at 767 G-H
[11]
See
Basson
supra
[12]
Experian
at paras 17, 17.1 and 17.2
[13]
Experian
at para 20
[14]
See
Coolair
Ventilator Co SA (Pty) Ltd v Liebenberg and Another
1967 (1) SA 686
(W) at
689G,
where it was held that;
'If . . . it is
objectively established that a particular item of information could
reasonably be useful to a competitor as such,
i.e. to gain an
advantage over the plaintiff, it would seem that such knowledge is
prima
facie confidential as
between an employee and third parties. . . .’
[15]
In
Reddy v. Siemens
Telecommunications (Pty) Ltd supra
[16]
See
Experian
at para 44, where it was held that;
‘
All of
the above, in my view, constitute confidential information which is
proprietary to the applicant and which it is entitled
to protect. It
follows that first respondent’s contention that this
information to which he had access whilst employed
by the applicant
is not confidential cannot be sustained. In any event, the
contention is legally untenable in that it is clear
from several
reported judgments on this issue, that irrespective of whether or
not information is in the public domain, the fact
that the first
respondent has obtained such information within the context of a
confidential relationship means that it in fact
is protectable….’
[17]
See
Mozart Ice Cream
Classic Franchises (Pty) Ltd v Davidoff and Another; Waste Products
Utilisation (Pty) Ltd v Wilkes and another
2003 (2) SA 515
(W) at 577B C.
[18]
See
Labournet
(Pty) Ltd v Jankielsohn and Another
at
para 43
[19]
Annexure
‘FA4’ to the Founding Affidavit
[20]
Annexure
‘FA9’ to the Founding Affidavit
[21]
See
Reddy
at
para 20;
Den
Braven SA (Pty) Ltd v Pillay and Another
2008
(6) SA 229
(D)
at 236 D-E
[22]
Experian
at para 20
[23]
See
Experian
at para 22, where it was held that;
“
The
ex-employer seeking to enforce against his ex-employee a protectable
interest recorded in a restraint, does not have to show
that the
ex-employee has in fact utilised information confidential to it: it
need merely show that the ex-employee could do so.
The very purpose
of the restraint agreement is to relieve the applicant from having
to show bona fides or lack of retained
knowledge on the
part of the respondent concerning the confidential information. In
these circumstances, it is reasonable for
the applicant to enforce
the bargain it has exacted to protect itself. Indeed, the very
ratio underlying the bargain is
that the applicant should not
have to contend itself with crossing his fingers and hoping that the
respondent would act honourably
or abide by the undertakings that he
has given. It does not lie in the mouth of the ex-employee, who has
breached a restraint
agreement by taking up employment with a
competitor to say to the ex-employer “Trust me: I will not
breach the restraint
further than I have already been proved to have
done”
[24]
Annexure ‘FA12’ to the Founding Affidavit
[25]
at paras 29 - 30