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[2018] ZALCJHB 263
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Refinery Post Production Facilities (Pty) Ltd v Lautre (J1836/18) [2018] ZALCJHB 263 (16 August 2018)
IN
THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not Reportable
case
no: J1836/18
In
the matter between:
THE
REFINERY POST PRODUCTION
FACILITIES
(PTY)
LTD
Applicant
and
CHARMAINE
LAUTRE
Respondent
Heard:
12 June 2018
Delivered:
16 August 2018
JUDGMENT
MAHOSI.J
Introduction
[1]
This
is an
application brought by the applicant for an order on the following
terms:
‘
1.
That this application be heard as an urgent application and that the
requirements pertaining to service and time periods be dispensed
with.
2.
That the respondent, for a period of 18 months of the date from this
order be interdicted and restraint from directly and
indirectly:
2.1 use for her own
benefit or for the benefit of any person, and disclose, any trade
secrets or confidential information to which
the respondent became
privy
during the course of her association with the applicant,
other than those persons directly connected with the applicant who
are
required to know such information solely for the conduct of their
performance, duties and functions, on behalf of the applicant.
2.2 disclose or attempt
to disclose or attempt to circumvent any of the commercial
relationships of interest that the applicant
may have with its
existing and/or prospective clients, associations, transactions,
projects, investments or deals and project flow.
2.3 disclose trade
secrets and confidential information or methods or working supplied
by or procured on behalf of the applicant
to any third party.
3. That the restrictions
detailed in prayers 2.1 to 2.2 be limited to the Gauteng Geographical
Region.
4. Breach her common law
duty to act in good faith towards the applicant, to protect the
interest of the applicant and not to place
herself in a position
where her interest conflicts with said duty.
5. Breach her common law
fiduciary duties to the applicant, by disclosing, divulging,
exploiting and/or used in whole or in part
by the respondent, or any
third party, whether natural or juristic, information relating to any
customer, potential customer, worker,
employee or persons with whom
she has dealt whilst in the employ of the applicant.
6. Breach her common law
fiduciary duties to the applicant by disclosing, divulging,
exploiting, and/or used in whole or in part,
by the respondent or any
third party whether natural or juristic, the respective names,
identities and/or contact details of any
applicant’s customers,
potential customers, employees and/or workers, with whom she dealt
whilst in the employ of the applicant.
7. Breach her common law
fiduciary duties to the applicant by disclosing, divulging,
exploiting, and/or used in whole or in part,
by the respondent or any
third party whether natural or juristic any details of contracts
between the applicant and its respective
customers and/or potential
customers.
8. That the cost of this
application be paid by the respondent on the scale as between
Attorney and Client.’
[2]
Prior to
outlining
the applicant’s claims in detail and to considering the issues
to which they give rise, it is necessary to summarise
the facts which
form relevant background to the dispute between the parties.
Relevant background
facts
[3]
The nature and scope of the applicant’s
work consist of,
inter alia
,
production services, post-production, studio rental, equipment sales
and equipment rentals.
[4]
The applicant employed the respondent from
5 March 2014 as a post producer. Her function was to manage and
oversee the rendering
of cinematographic material (mainly advertising
material) in a format known as a digital cinema package (DCP) which
makes it possible
to display the material in cinemas.
[5]
During the period between February and
April 2018, the applicant underwent a process of retrenchment and
dismissals due to operational
requirements. During this period, the
respondent was offered the position of General Manager which offer
she rejected for reasons
which are not important for the purpose of
this judgment. On 30 March 2018, the respondent tendered her
resignation.
[6]
On 1 April 2018, the respondent commenced
employment with Beyond Sound (Pty) Ltd (Beyond Sound) which
employment relationship still
subsists and is doing the duties of the
production of DCPs.
[7]
The parties did not conclude a Restraint of
Trade Agreement. The applicant brought this application in reliance
on certain common
law duties which it alleges are owed by the
respondent as well as on certain provisions of her employment
contract. Some
of the provisions of the
contract of employment the applicant seeks to rely on, which are
relevant to this application, read as
follows:
‘
10.
CONFIDENTIAL INFORMATION
10.1 The employee is
obliged to enter into the Confidential Undertaking Agreement with the
employer. The employee is obliged, while
employed and thereafter, not
to disclose in any form, any trade or professional secrets or any
confidential information about the
employer’s business or its
methods or its clients, nor may he/she use such secrets or
information for his/her own advantage
or for the advantage of any
third person. This includes any information relating to specialized
knowledge, special processes and
ideas, methods and research.
10.2 For the purposes of
this clause:
“
10.2.1
“confidential information” shall mean any information
relating to the business of Refinery, and its successors
in title,
assigns or affiliates, including but not limited to information in
respect of Refinery’s staff engagement policies,
contractual
relationships with third parties, Refinery’s contact and
customer base, broadcasting distribution mechanisms
and strategies,
discounting policies, marketing strategies, the internal operation
and control of Refinery, trade secrets, Refinery’s
financial
performance and structure, Refinery’s future and long-term
plans and any other information of a proprietary nature
regarding
Refinery’s business; and,
10.2.2
The employee acknowledges that, as a result of his engagement with
the Refinery and in respect of his responsibilities towards
Refinery,
the employee will have access to the confidential information, and
have opportunities to develop personal relationships
with clients,
customers, and other third parties and will acquire knowledge related
to the confidential information and materials
and other goodwill
established by Refinery.
The employee
further acknowledges that the only reasonable and effective manner
for Refinery to protect its rights in respect of
confidential
information, client relationships and trade secrets is the imposition
of the provisions of Clause 10.3 below.
10.2.3
The employee shall not during his/her engagement by Refinery or any
time after its termination for any reason whatsoever,
disclose to any
person or persons whatsoever or otherwise make use of any
confidential information and materials which the employee
may have
come into his/her possession in the course of your engagement by the
Refinery relating to the business of Refinery or
its associated
companies.
10.2.4 The employee
undertakes that he/she will not during the term of this agreement,
have an interest in or be engaged, whether
directly or indirectly, in
any capacity, including but not limited to, proprietor, shareholder,
partner, member of a close corporation,
consultant, advisor,
director, manager, employee, contractor and agent, in any entity
which is, whether directly or indirectly,
in competition with
Refinery.
10.2.5 The employee
further undertakes that he/she will not during the term of the
agreement perform any of the services for which
he has been engaged
by the Refinery for any third party. Without derogating from the
generality of the above, the employee shall
not during the term of
this agreement:
10.2.5.1 deal, whether
directly or indirectly, with any of Refinery’s suppliers,
distributors or other clients and/or customers
of Refinery other than
for the benefit of Refinery; or,
10.2.6 Carry on the
business of Refinery for his/her own benefit or the benefit of any
third party.
10.2.7 The employee
acknowledges and agrees that the provisions of the above clauses are
to be interpreted in their widest sense
and that the limitations
herein contained are reasonable as to subject matter and area.”
[8]
In its founding affidavit, the applicant
submitted that the respondent used her knowledge of the applicant’s
clients and business
relationship obtained during her employment with
the applicant to solicit business in direct competition with the
applicant.
[9]
On 15 April 2018, the applicant’s
attorneys served the respondent with a letter of demand wherein,
inter alia
,
various written undertakings were sought from the respondent within
24 hours in relation to her abiding by the terms of the contract
of
employment. According to the applicant, the respondent solicited some
if its client’s business associates to follow her
to her new
employer and she further disclosed confidential information about its
business or its methods of business.
[10]
On 20 April 2018, the respondent’s
attorneys, responded disputing that the conduct of the respondent had
been in breach of
any duties owed by her to the applicant and pointed
out that the applicant was not restrained by any agreement preventing
her from
competing with the applicant. Nonetheless, the undertaking
was given that the respondent would not disclose any trade or
professional
secrets or any confidential information about the
applicant’s business or its methods or its clients and that she
would not
use such secrets or information for her own advantage or
the advantage of anyone else.
[11]
On 2 May 2018, the applicant’s
attorney wrote to the respondent’s attorney expressing its
dissatisfaction with the applicant’s
failure to provide an
undertaking as demanded, further demanding such an undertaking by 7
May 2018 and threatened to bring an urgent
application to this Court
on 10 May 2018. The respondent’s attorney wrote to the
applicant’s attorney and made it clear
that the respondent was
not prepared to give the undertakings as demanded by the applicant
and that any application brought by
it would be opposed. The
applicant then launched this application on 29 May 2018.
[12]
It is the applicant’s submission that
the respondent was introduced to all networks and clients that
existed within the applicant,
and that she was provided with
strategies on how to grow the business, together with the contact
details of clients and contact
persons. Further that she was
entrusted with the applicant’s intellectual property and
substantive client list, relating
to every aspect of the how, what,
when and where of the business.
[13]
The respondent opposed the application and
submitted that the common law duties contended by the applicant are
not owed and that,
properly construed, the provisions of her
employment agreement do not prevent her from competing with the
applicant. The respondent
further contends that the alleged conduct
of which the applicant complains, at the very best for the applicant,
is of past wrongs
which are not capable of redress by way of
interdictory relief.
[14]
Furthermore, the respondent submitted that
this application should be dismissed solely on the basis of lack of
urgency. I am of
the view that the matter ought to be dealt with as
one of urgency.
The applicable legal
principles and analysis
[15]
The applicant seeks final relief against
the respondent on the basis that she allegedly breached her common
law fiduciary duties
and confidentiality undertaking afforded to the
applicant during her period of employment and further on the basis of
her alleged
breach of common law rights resulting in unlawful
competition with it.
[16]
The law on restraints of trade agreements
is quite clear. In order for a restraint covenant to be enforced by
way of a final interdict,
an employer has to show that there is a
valid restraint of trade agreement, that the same has been breached
or there is a reasonable
apprehension that same will be breached, and
that the employer will suffer irreparable harm. Thereafter, the
onus
shifts to the employee to show that the covenant is either invalid or
unenforceable because it is unreasonable and/or because it
is against
constitutional values and public policy.
[17]
The respondent, in summary, states her
defence thus: Firstly, that an enforcement of the covenant would be
an infringement of her
Constitutional rights to freedom of trade,
occupation and profession. Secondly, the applicant has no interests
which are deserving
of protection and finally that the applicant
failed to meet the requirements for a final interdict.
Enforceability of the
confidentiality clause
[18]
As aforesaid, the confidentiality clause
that the applicant relies on is an expressed clause in the employment
contract. It is an
established principle that employment contracts
are binding on parties and are therefore enforceable unless it can be
shown that
the parties were not on an equal footing when entering
into the contract, or that the employment contract was invalid
ab
initio
, or that it is contrary to
public policy or it is an illegal contract.
[19]
When evaluating the bargaining power
between the parties, the Court will take into account the position
and status of the employee
to the contract. It is clear from the
facts of this matter that the respondent did not hold a low-level
position that could be
seen to have been exploited by the applicant
in entering this type of agreement. In fact, the respondent never
raised any concerns
with regards to the employment contract.
Therefore the only reasonable conclusion that could be drawn is that
the employment contract
is binding on the parties to it.
[20]
It
is trite that the restraint owes its origin, exists and is defined in
terms of the contractual arrangement between the parties.
[1]
Therefore
a restraint clause, however, couched, which is incorporated into an
employment contract is prima facie
enforceable
against an employee. Further, it cannot be argued that the
resignation of the employee brought the agreement as contained
in the
employment contract to an end. A confidentiality clause endures
beyond the contract.
[2]
[21]
In this matter, the employment contract had
an expressed clause providing for,
inter
alia
, that the respondent should not
disclose any information even after the termination of the employment
contract. Since the respondent
agreed to the confidentiality clause,
she is therefore bound by same.
[22]
The
Respondent argues quite articulately that the doctrine of
“
pacta
sunt savanda (is) not a sacred cow that should trump all other
considerations.”
I
fully agree that the values as enshrined by our Constitution need to
be taken into account when deciding when this doctrine can
be
interfered with. However, in this agreement, I see no reason that is
contrary to public policy and our constitutional values
that would
make me interfere with it. Therefore a restraint of trade encompassed
in an employment contract is enforceable if shown
to be
reasonable.
[3]
[23]
The
applicant seeks final interdictory relief against the respondent. For
this Court to grant a final interdict, the applicant must
establish
three requisites all of which must be present. These are a clear
right, injury actually committed or reasonably apprehended
and
absence of an alternative legal remedy.
[4]
[24]
The applicant herein primarily seeks to
protect its customer connections, which it contends; if the
respondent were free to solicit
and take advantage of, it would be to
the detriment of the applicant.
Clear right - Protectable
interest
[25]
The applicant’s case is underpinned
by allegations concerning the respondent’s conduct during the
month of March 2018
while she was still employed by the applicant as
well as when she was already in the employ of Beyond Sound. The
following is common
cause:
25.1 On 1 March 2018, the
applicant sent an e-mail to Mr. Fiaz Mohamed wherein she indicated
that “
please see attached some info to date. I will continue
to do homework, contact more clients on my list and let them know
that I’ll
be changing premises, but not service levels! I am
quite confident that a lot of them will come with me…”.
25.2 During March 2018,
the respondent addressed further correspondence attempting to set up
meetings with several stakeholders.
On 29 March 2018, the respondent
addressed another e-mail correspondence to Kim Cox, a senior account
executive at Ster Kinekor
(one of the applicant’s clients) in
which she arranged a meeting.
25.3 On 11 April 2018,
after she had left the employ of the applicant, the respondent
addressed an e-mail to Paul Meyer of Luma,
an entity described by the
applicant as its supplier and production partner, indicating
inter
alia
that she left the applicant to head up cinema
post
-
production at Beyond
Sound. She further invited him to inspect Beyond Sound’s
facility with a view to exploring the
possibility of a future working
relationship.
[26]
The applicant avers that it has a
protectable interest both in the form of confidential information
that if disclosed to the respondent’s
new employer would be
detrimental to their business and secondly that the respondent has
customer connections which if exploited
by her new employer would
cause irreparable harm to the applicant. I believe it should be
mentioned from the outset that both of
these do not have to be
present in order for the applicant to show that it has a protectable
interest. If one is shown to exist,
and not the other, the applicant
would still have a protectable interest.
Confidential
Information
[27]
The applicant contends that the respondent
should be restrained because she is in possession of confidential
information which if
used will be to the detriment of the applicant’s
business. The respondent became privy to customer information due to
the
position she held at the applicant.
[28]
The
respondent’s defence is that the information that is in her
possession is not information that could be deemed confidential
and
would then not be worthy of protection. The court has found that
information is considered to be a trade secret or confidential
information if
“
exploited
by a competitor this would be to the serious detriment of the
business, goodwill and best interests of the applicant.”
[5]
[29]
When embarking on an enquiry into whether
information is worthy of protection or in other words a protectable
interest, the information
relied upon by the applicant has to meet
the following requirements:
29.1 It relates to and is
capable of application in the trade industry;
29.2 Most of it is secret
and confidential;
29.3 Objectively viewed
it is of economic or business value to the plaintiff.
[30]
The enquiry into whether information can be
found to be confidential in this context is an objective enquiry. One
has to bear in
mind that the classification of the information is not
what cloaks it with confidentiality. Something that might seem common
sense
could be declared to be confidential and worthy of protection
whereas information that might be useful might still not be
classified
as information worthy of protection.
[31]
On the facts of this matter, it can be
presumed that the information as to current clients and future
clients and what type of work
they are used to receiving from the
applicant would be capable of application in the trade industry.
Objectively viewed this information
is of economic value to the new
employer as it would help it on its way in navigating the market
because he knows where he needs
to reach. The question then arises is
whether it is mostly secret and confidential.
[32]
The
respondent argues that the information is freely available in the
public domain and with a little effort on the new employer’s
side same would have been established. I find the following quote
from the matter of
Coolair
Ventilator Co. (SA) Ltd v Liebenberg and Another
[6]
,
per
Marais J, apposite:
‘
Judging
from the speed with which he tried to establish contact with the
manufacturer on behalf of the second respondent, he realized
how
valuable the information could be for the second respondent. As such
it would fall in all probability in the category of confidential
information. If in addition it is a matter of good faith how and what
information is used by an ex-employee, then clearly the first
respondent acted
mala fide
in writing the letter of February 10
th
,
prima facie
with the intention of harming the business interests of the
applicant.’
[33]
The
respondent argues that the e-mail of 1 March 2018 to Faiz Mahomed,
[7]
at
worst constitutes a breach of her fiduciary duties whilst in the
employ of the applicant and cannot be looked upon to constitute
a
breach thereafter. I find it opportunistic of the respondent to place
a dividing line to differentiate her actions into the categories
of
“before” and “after”. It is apparent from the
wording of the e-mail that the information was collated
in breach of
her fiduciary duties and also as a way to syphon confidential
information to be used in her new employ to the benefit
of her new
employer and to the detriment of the business of the applicant.
[34]
In
the e-mail, she succinctly states that she “
will
continue to do homework, contact more clients on my list…”
At no point in her argument does the respondent state that she no
longer has any information or that any information collated after
the
abovementioned e-mail has not yet been given to the new employer or
that she undertakes not to divulge the information. The
court in
Reddy
v Siemens Telecommunications (Pty) Ltd
[8]
found
that an employer has a protectable interest because the employee’s
“
loyalty
will be to his new employers and the opportunity to disclose
confidential information at his disposal, whether deliberately
or
not, will exist.”
Customer connections
[35]
The
second leg of the applicant’s argument is that the respondent
has established customer connections with its customers
and has the
potential to influence them away to her new employer. They argue
further that her conduct post-resignation is a direct
breach of the
restraint covenant and therefore the applicant has established a
clear right for interdictory relief.
The
respondent’s defence is that she already had an established
relationship with Ster Kinekor, Nu-Metro and others prior
to her
employment with the applicant.
[9]
[36]
The
Court in determining whether there are protectable customer
connections does not merely look at the fact that the employee had
contact with the customer but the connection “
must
be such that it will probably enable the former employee to induce
the customer to follow him or her to a new business.”
[10]
In
other words, the employee’s interactions with its employer’s
clients are not enough to create a customer connection
that is worthy
of protection. However, a restraint covenant would be enforceable if
the employee “
had
access to the company’s customers and could use his/her
relations with the company’s customers to the advantage
of a
competitor and to the detriment of the company.”
[11]
[37]
It is common cause that the respondent has
the intention to “deal” with the applicant’s
clients. The respondent
has explicitly stated in her pleadings that
she is not bound from competing with her former employer and has in
fact already approached
their existing customers with the view to
lure same for her current employer. In fact, in her own words, in the
abovementioned
e-mail to her new employer, she states that she is
“
confident that a lot of them will
come with (her).”
Further in
another e-mail to one of the applicant’s clients, she states
that she is “
lucky enough to have
Ster-Kinekor and Popcorn (for Nu Metro) follow (her there), as well
as all the agencies/post companies (she
has) spoken to so far.”
[38]
This
is a clear
indication of her intent of luring the applicant’s customers as
she argues a restraint covenant does not bind her.
Further, she is
implicit in her use of the wording “so far” which
indicates that she is not stopping at only the clients
she had
already lured away from the applicant but in fact is continuing to
try to use her customer connections to lure others as
well. From the
above, it is clear that the employee is in a position to act to the
detriment of the applicant. Therefore the applicant
has established
that it has a clear right that it seeks to protect.
Irreparable harm and
lack of alternative remedy
[39]
Once
the applicant has established that it has a clear right, the Court
needs to determine whether the applicant will suffer irreparable
harm
and whether there is an appropriate alternative remedy but for the
interdictory relief sought. Steenkamp J, stated the following
in his
judgment of
Continuous
Oxygen Suppliers
[12]
:
‘
[49]
I have come to the conclusion that the restraint of trade agreement
is enforceable and that the applicant has interests worthy
of
protecting. It is axiomatic that the applicant will suffer
irreparable harm if it is not enforced. The potential harm caused
by
an employee who is in a position to divulge trade secrets to and
exploit customer connections in favour of her new employer
cannot be
easily remedied by a damages claim in due course.
[50] … The obvious
alternative remedy of a damages claim is cold comfort to an applicant
that seeks to enforce a legitimate
restraint of trade covenant. By
the time a damages claim is likely to be heard, the horse would have
bolted and the harm would
have been done. That harm is very difficult
to repair.’
[40]
Therefore the applicant has shown that it
has a protectable interest that if not enforced will cause
irreparable harm to its business.
The applicant should not be denied
urgent relief because it has an alternative remedy in due course,
because such a remedy will
be cold comfort.
[41]
However, even if it is argued that the
above is incorrect, the alternative remedy sought by the applicant in
terms of the common
law fiduciary duty due to it by the respondent,
is an interdict based on unlawful competition.
Unlawful Competition
[42]
I
do not intend to delve deeply into the law surrounding unlawful
competition. The doctrine of unlawful competition is based on
the
principle of
contra
bonos mores
which is conduct that would be deemed to be contrary to the values of
the trading industry and the community at large. The court
in
Square
One Power Solutions v Norval and Others (Square One Power Solutions
)
[13]
succinctly enunciated the principle for unlawful competition thus:
‘…
Filching
confidential information of a trader to promote the interests of
another to his prejudice is one of the instances that
are recognized
by our law as unlawful competition. And a trader needs no restraint
of trade contract to obtain protection against
such unlawful
conduct.’j
[43]
The
respondent herein raises a few grounds in defence of whether her
conduct would amount to unlawful competition. The first being
that
the information taken was not confidential. The Court in
Square
One Power Solutions
(supra)
went further to state that the absence of confidentiality does not
militate against the applicant’s clear right. The
applicant has
a right to the goodwill of its business and to the protection of such
right against wrongful infringement.
[14]
[44]
The
second defence raised by the respondent is that the information was
already in the public domain and had Beyond Sound searched
for the
information, it would have obtained the same information that was
sent by the respondent. I find this argument opportunistic.
The
information, in the form of the rate card and equipment required,
that was sent by the respondent to Beyond Sound was not in
the public
domain, for example, on a public billboard, or an advertisement on
the television or on the company website for anyone
searching to
find. In other words, it was not “
readily
available to the public”
[15]
but was made available to the employer’s competitor through the
efforts of the respondent. The enquiry would have been different
if
in fact the competitor compiled the information and the respondent
merely commented on it. However, the fact that it could have
been
done does not exonerate the respondent from her actions.
[45]
The information with regards to the
client’s list provided to the competitor cannot be argued as
public knowledge. I accept
that competitors would have a general
knowledge of some of the applicant’s clients because being in
the same industry would
result in some of that knowledge. However a
detailed list of most of the clientele of the applicant’s, with
a promise of
more cannot be successfully argued to have been in the
public domain.
[46]
The
Court in
Square
One Power Solutions
quoted with approval
Easyfind
International v Instaplan Holdings
[16]
that
“
our
law also recognizes certain categories of information or documents as
being of a confidential nature. A customer’s list
is one such
type of document.”
[17]
The fact that such a list was created by the respondent is neither
here nor there. The information contained on the list was
confidential
as it was not readily available in the public domain and
prima
facie
our law recognises the confidentiality of client lists.
[47]
Another argument furthered by the
respondent is that some of the clients of the applicant were her
former clients with whom she
established relationships in her
previous employ. It is common knowledge that an employer employs an
employee because of her skill
and expertise as well as for the
customer connections she might have had previously with the
ex-employer. Does that then make those
clients the employee’s
private property to be taken away when resigning? This cannot be so.
[48]
The
court in
Rawlins
and Another v Caravantruck (Pty) Ltd
[18]
stated that:
‘
Taking
account of the realities of commerce, it is a fair inference in these
circumstances that it was Rawlins’ employment
with the
Respondent that gave him the opportunity to consolidate or even
strengthen the prior rapport which he had with his customers.’
[49]
Therefore, even if an employee had
established a relationship with the clients
prior
to
the commencement of his/her
employment, the fact that his/her current employment allowed for the
relationship to
be strengthened
and for the employee to gain
an
influence
over such customers would
then make those customer connections an asset of the employer.
Further, it has not
been argued
that the relationships with all the clients on the list were from
before her employ.
In fact,
she continuously speaks of Ster-Kinekor and Nu-Metro
,
however
these clients were not
exhaustive of the list.
[50]
Finally, the respondent argues that the
breach upon which the applicant relies
was
conduct
prior
to
her resignation and can therefore
not be used to establish a breach of a restraint covenant or prove
unlawful competition. Aside
from her conduct after her resignation
and her clear intention to continue with her conduct, and the fact
that she has indeed lured
away clients from the applicant, I find the
following quote from Musi J in
Square
One Power Solutions
apposite:
‘
It
is not the fact that the first respondent has been canvassing the
clients after his resignation that taints his conduct. What
does
taint his conduct is the fact that he abused his relationship of
trust to initiate this process of luring away the clients.
He now
wants to be free to complete that illegitimate process from outside.
He wants to use his resignation as a magic wand to
legitimize his
otherwise unlawful activity. I am positive that that cannot be
countenanced by the trading community and indeed
by the community at
large.’
[19]
[51]
As found above, an award of damages would
be cold comfort. If the respondent’s version is to be accepted,
she has already
lured away two important clients from the applicant
and intends on luring others as well. This is clearly a detriment to
the applicant’s
business as a business cannot function without
a clientele. Further, case law shows that an interdict should be the
preferred remedy
for unlawful competition.
Conclusion
[52]
I, therefore, conclude that the applicant
has a protectable interest and will suffer irreparable harm if the
respondent is not restrained.
The applicant’s seek to restrain
the respondent for a period of 18 months however seems to be
excessive. Given the relationship
between the respondent and the
clients a protracted restraint will not diminish that relationship,
however, the purpose of the
restraint would be to afford the
applicant reasonable time to consolidate its efforts and to
re-establish its connections with
its clientele. I find that a
restraint for a period of 12 months would suffice.
Costs
[53]
I
have had regard to the issue of costs. In terms of section 162 of the
Labour Relations Act
[20]
, the
Court has a wide discretion in awarding costs. The Constitutional
Court has recently reiterated in
Zungu
v Premier of the Province of Kwa-Zulu Natal and Others
[21]
that costs orders should be made in accordance with the requirements
of law and fairness. In this matter, I am of the view that
the
requirements of law and fairness dictate that there should be no
order as to costs.
[54]
I accordingly make an order as follows:
Order:
1.
This application is heard as an urgent application and the
requirements pertaining to service and time periods are hereby
dispensed
with;
2. The
Respondent, for a period of 12 months from date of this order is
hereby interdicted and restrained from directly and indirectly:
2.1 using for her own
benefit or for the benefit of any person, and disclose, any trade
secrets or confidential information to which
the respondent became
privy
during the course of her association with the applicant,
other than those persons directly connected with the applicant who
are
required to know such information solely for the conduct of their
performance, duties and functions, on behalf of the applicant.
2.2 disclose or attempt
to disclose or attempt to circumvent any of the commercial
relationships of interest that the applicant
may have with its
existing and/or prospective clients, associations, transactions,
projects, investments or deals and project flow.
2.3 disclose trade
secrets and confidential information or methods or working supplied
by or procured on behalf of the applicant
to any third party.
3. The restrictions
detailed in prayers 2.1 to 2.2 are limited to the Gauteng
Geographical Region.
4. There is no order as
to costs.
__________________
D Mahosi
Judge of the Labour Court
of South Africa
Appearances:
For the applicant:
Advocate ASL Van Wyk
Instructed by Macintosh
Cross & Farquharson Inc
For the third respondent:
Advocate G. Porteous
Instructed by Gabri Van
Rensburg Attorneys
[1]
Singh v
Adam
(2006) ILJ 385 (LC).
[2]
Penta Publications (Pty) Ltd v Schoombie and Others
[2000] 2 BLLR
199
(LC)
[3]
Labournet Holdings (Pty) Ltd v McDermott and Another (2003) 24 ILJ
185 (LC).
[4]
Prest
The
Law of Practice of Interdicts
at 52.
[5]
Shoprite
Checkers (Pty) Ltd v Jordaan and Another
[2013] ZALGJHB 333.
[6]
1967 (1) SA (686) (W) at page 691 at G.
[7]
At page 30 of the Pleadings bundle.
[8]
(2007) 28 ILJ 317 (SCA).
[9]
Respondent’s Answering Affidavit at para 48 onwards.
[10]
Den
Braven S.A. (Pty) Limited v Pillay and Another
2008 (6) SA 229
(D).
[11]
Continuous
Oxygen Suppliers (Pty) Ltd t/a Vital Aire v Meintjies and Another
(2012) 33 ILJ 629 (LC) (
Continuous
Oxygen Suppliers
).
[12]
At paras 49 and 50.
[13]
[2004] ZAFSHC 11.
[14]
Square
One Power Solutions
at para 12.
[15]
Square
One Power Solutions
at para 13.
[16]
1983 (3) SA 917 (W).
[17]
Square One Power Solutions at para 12.
[18]
[1992] ZASCA 204
;
1993 (1) SA 537
(A).
[19]
At para 18.
[20]
66 of 1995, as amended.
[21]
(2018)
39 ILJ 523 (CC)