About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Johannesburg Labour Court, Johannesburg
SAFLII
>>
Databases
>>
South Africa: Johannesburg Labour Court, Johannesburg
>>
2020
>>
[2020] ZALCJHB 168
|
|
Medtronic (Africa) Proprietary Limited v Cawood and Another (J 194/20) [2020] ZALCJHB 168 (12 June 2020)
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not reportable
Case no: J 194/20
In the matter between:
MEDTRONIC
(AFRICA) PROPRIETARY LIMITED
Applicant
and
MARK
ADRIAN CAWOOD
First
Respondent
BIOTRONIK
PROPRIETARY LIMITED
Second
Respondent
Heard:
28 May 2020
Delivered:
12 June 2020
In
view of the measures implemented as a result of the Covid-19
outbreak, this judgment was handed down electronically by circulation
to the parties' representatives by email. The date for hand-down is
deemed to be 12 June 2020.
JUDGMENT
PRINSLOO, J
Introduction:
[1]
The Applicant sells medical devices and the
First Respondent (Mr Cawood) commenced his employment with the
Applicant on 1 September
2014 as a sales representative within the
Applicant’s spine and biologics department.
[2]
During 2016, the Applicant merged with
Covidien and all employees were required to sign new contracts of
employment, which Mr Cawood
signed in April 2016. The Applicant’s
‘general terms’ were incorporated into Mr Cawood’s
contract of employment.
[3]
The general terms in Mr Cawood’s
contract of employment contained restraint of trade and
confidentiality undertakings. In
essence, Mr Cawood agreed to be
restrained for a period of 12 months from the date of termination of
his employment with the Applicant
from
inter
alia,
taking up employment with another
entity which develops, designs, manufactures, procures, markets or
sells products in South Africa,
which compete with the Applicant’s
products. He further undertook not to disseminate, divulge or
disclose the Applicant’s
confidential information.
[4]
In October 2018, Mr Cawood was appointed as
a field and technical consultant in the Applicant’s ‘cardiac
rhythm and
heart failure’ (CRHF) division. His position
entailed that he was required to promote and sell the Applicant’s
products
to the cardiologists at the hospitals he was responsible
for. He was based in the Inland South Region.
[5]
The Applicant’s CRHF division is
divided into various departments and relevant to this application is
the pacing department
which sells and promotes the bradycardia,
tachycardia and heart failure product lines. Bradycardia is a
condition where the patient
has a slow heartbeat and the condition is
treated through the implanting of a pacemaker. Tachycardia is a
condition where the patient
has a fast heart rate and the condition
may be ventricular or atrial. The treatment may vary depending on
what type of tachycardia
the patient may have and could range from
medication to surgery.
[6]
The Applicant and its competitors promote
their products, which are often interchangeable and similarly priced,
to their customers,
being medical specialists who are resident at
particular hospitals.
[7]
Mr Cawood resigned from the Applicant’s
employment in December 2019 and his last day of service was 31
January 2020. He subsequently
took up employment with the Second
Respondent (Biotronik), a direct competitor of the Applicant. In
taking up employment with Biotronik,
Mr Cawood acted in breach of his
restraint of trade agreement.
[8]
On 21 January 2020, the Applicant’s
attorneys sent a letter to Mr Cawood reminding him of his restraint
of trade and confidentiality
undertakings and to demand an
undertaking that he would not act in breach thereof.
[9]
On 4 February 2020, Mr Cawood’s
attorneys responded and made a tender that he would comply with his
undertakings to some extent,
which was detailed in the attorneys’
letter.
[10]
On 7 February 2020, the Applicant’s
attorneys indicated that the Applicant was prepared to allow Mr
Cawood to continue to
be employed by Biotronik and to accept the
undertakings he had made, but it was not prepared to accept the
duration of the undertakings.
The parties could not reach an
agreement to settle the matter and the Applicant approached this
Court for relief.
[11]
The matter was set down for hearing on the
urgent roll of 28 May 2020. Due to the Covid-19 lock down measures,
the parties presented
arguments via Zoom.
The issue to be
decided
[12]
The Applicant accepted that Mr Cawood be
employed by Biotronik, notwithstanding the restraint undertaking he
had agreed to in his
contract of employment to the effect that he
would not be employed by a competitor for a period of 12 months after
termination
of his employment.
[13]
In the notice of motion, the Applicant
seeks an order as follows:
‘
Interdicting
and restraining Mr Cawood for a period of 12 months until 31 January
2021 within South Africa from:
1.
directly or indirectly,
marketing, promoting, selling or providing any technical support or
being required by Biotronik to, directly
or indirectly, market,
promote, sell or provide any technical support in respect of any
products that compete with the Applicant’s
CHRF product range
to any of the cardiologists and hospitals listed in “NM1”;
and
2.
for Mr Cawood’s own
benefit or the benefit of Biotronik or any other third party,
enticing, encouraging, inducing persuading
or soliciting any employee
of the applicant to leave the employ of the applicant.
3.
disclosing, disseminating,
divulging, relaying or in any other way conveying the confidential
information of the Applicant to any
third party including Biotronik.’
[14]
It is evident from the papers filed that
there is no dispute that Mr Cawood signed a contract wherein he
agreed to certain restraint
of trade and confidentiality undertakings
in favour of the Applicant. Mr Cawood accepted that the Applicant and
Biotronik are direct
competitors and that the products they promote
and sell, are interchangeable. He further accepted that the Applicant
has proprietary
interests, in the form of customer connections and
confidential information.
[15]
Insofar as confidential information is
concerned, Mr Cawood gave an undertaking not to disclose any
confidential information. It
is evident from his answering affidavit
as well as the undertakings Mr Cawood was prepared to give that he
has an intention to
comply, to some extent, with the terms of the
confidentiality and restraint undertakings, as he had agreed to in
his contract of
employment. In the tender Mr Cawood made, he
undertook to comply with his confidentiality undertakings and not to
disclose any
confidential information, not to approach or communicate
with the Applicant’s employees with a view to induce or
encourage
them to leave the Applicant’s employ and not to
approach or communicate with any of the Applicant’s clients, as
per
“NM1”, for a period of six months, from 1 February
2020 to 31 July 2020.
[16]
In his opposing affidavit Mr Cawood
tendered not to be involved in any capacity for any visits to the
doctors, their replacements
and /or additional doctors taking up
chambers at the hospitals, as per “NM1” (the relevant
doctors), for the period
up to 31 August 2020. Mr Cawood increased
his initial six-month tender with another month. It is not explained
what caused the
change of heart and why Mr Cawood tendered an
additional month in respect of the restraint.
[17]
Mr Cawood does not dispute the existence of
a customer connection that is worthy of protection through a
restraint. Mr Cawood further
did not dispute that where competing and
interchangeable products are available, cardiologists elect to use
the product promoted
by a representative whom they trust and work
well with. The fact that Mr Cawood tendered a seven-month period of
restraint in respect
of the relevant doctors is a concession that the
Applicant has an interest to be protected and that he indeed has
customer connections
with the relevant doctors.
[18]
In short: there is very little in dispute
in this matter as Mr Cawood effectively consented to the relief the
Applicant seeks. The
only contentious issue is the period of the
restraint. Mr Cawood’s tender not to be involved with the
doctors listed in “NM1”
is for the period up to 31 August
2020 and the Applicant seeks to enforce the restraint for the period
up to 31 January 2021.
[19]
The question is therefore
whether
the period of the restraint that the Applicant seeks to enforce go
beyond what is reasonably required to protect its interests
relating
to customer connections.
Applicable principles
[20]
The
principles applicable to restraint agreements are well-established.
In
Massmart
Holdings v Vieira and Another
[1]
the Court summarised them as follows:
‘
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)). ‘
[21]
In
Reddy
v Siemens Telecommunications (Pty) Ltd
[2]
the Supreme Court of Appeal (SCA) upheld a 12-month restraint against
an employee who had joined a competitor (Ericsson). The Court
restated the following principles:
‘
A
Court must make a value judgment with two principal policy
considerations in mind in determining the reasonableness of a
restraint.
The first is that the public interest requires that
parties should comply with their contractual obligations, a notion
expressed
by the maxim
pacta servanda
sunt
. The second is that all persons
should in the interests of society be productive and be permitted to
engage in trade and commerce
or professions. Both considerations
reflect not only common-law but also constitutional values.
Contractual autonomy is part of
freedom in forming the constitutional
value of dignity, and it is by entering into contracts that an
individual takes part in economic
life.’
[22]
In casu,
there
is no dispute that the contract of employment signed in 2016 is valid
and enforceable. It is common cause that Mr Cawood had
agreed to the
restraint undertakings and that his employment with Biotronik
constitutes a breach of those undertakings.
[23]
In his contract of employment, Mr Cawood
agreed that he would not, for a period of 12 months after the
termination of his employment,
render services to any person or
entity, in connection with the development, design, manufacture,
procurement, marketing or sale
of a competitive product in South
Africa.
[24]
The point of departure is thus: a restraint
of trade agreement is enforceable, unless it is unreasonable.
[25]
The Applicant limited the restraint it
seeks to enforce significantly to include only the hospitals and
medical specialists as reflected
in “NM1” and Mr Cawood
accepted the restraint in that regard. Mr Cawood
is
free to remain in the employ of a competitor of the Applicant.
[26]
Contractually Mr Cawood is restrained for a
period of twelve months, but he contends that a period of six months
is reasonable and
that the restraint should be confined to that. Mr
Cawood’s position in fact is that the Applicant is not entitled
to restrain
him, other than in terms of the tender he had made.
Analysis
[27]
The
party seeking to enforce a restraint need only invoke the restraint
agreement and prove a breach of the agreement, nothing more.
A
restraint of trade can be enforced and “
it
is sufficient for the applicant to show that the customer contact
exists and that they can be exploited by the former employee.
[3]
”
[28]
The Applicant has limited the relief it
seeks and in short it seeks an order restraining Mr Cawood from
contacting the relevant
doctors for the period of his restraint, as
contractually agreed to. There is no dispute that customer
connections had been established
with the relevant doctors.
[29]
The Applicant seeks to enforce the
restraint of trade, in the limited sense that I have already alluded
to, for a period of 12 months.
Mr Cawood on the other hand seeks to
escape a significant period of his restraint.
[30]
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.
[31]
It is evident that in the tender he had
made and in opposing this application, Mr Cawood seeks to vary the
terms of the agreement
that the parties concluded, after the fact and
unilaterally so, by tendering a six / seven-month restraint, instead
of the 12 months
that the parties agreed to.
[32]
Effectively, Mr Cawood seeks to renegotiate
the terms of the restraint of trade he had agreed to, in
circumstances where he had
resigned from the Applicant’s employ
and took up employment with a direct competitor. His case is that the
extent and duration
of the restraint are unreasonable as six months,
as opposed to 12 months, is an appropriate period to sufficiently
protect the
Applicant’s proprietary interests.
[33]
This Court has to decide whether the
restraint period of 12 months is, based on the facts, too long and
unreasonable. This calls
for a consideration of the reasons proffered
by Mr Cawood in support of his case that the restraint is
unreasonable and should
only be enforced for six / seven months.
[34]
In my view, there are three main reasons
put forward by Mr Cawood in support of his case and to show that he
should be allowed to
escape the full duration of the restraint
period. I will deal with them in turn.
[35]
Firstly, it appears that Mr Cawood is of
the view that the period of 12 months is unreasonable because he did
not build strong relationships
with the relevant doctors. This is so
because he could only provide technical support on brady products and
because he has limited
training and qualifications. As he put it, he
was not the ‘complete package’.
[36]
In support of this, Mr Cawood explained
that he had spent 15 months in the Applicant’s CRHF division as
a technical consultant
and his duties included calling on
cardiologists and cardiothoracic surgeons, assisting on the product
line and providing technical
assistance. He is not qualified as a
clinical technologist and he has no recognised qualification or
training on tachycardia (tachy).
He was limited to work only on CRM
/bradycardia (brady) operations and procedures.
[37]
Mr Cawood explained that when the Applicant
employed him in the CRM division, he was not sent for training and he
only had basic
training in as far as brady is concerned and he is not
deployable for any tachy procedures.
[38]
In my view there is no merit in this
argument.
[39]
The Applicant submitted that Mr Cawood
developed relationships with cardiologists during his time as a field
and technical consultant,
through which he was able to promote and
sell products. This provided the Applicant with an advantage and by
taking up employment
with Biotronik, Mr Cawood has the advantage of
being able to use the existing relationships he has with the
cardiologists to maintain
contact with them and to promote
Biotronik’s products instead of the Applicant’s products.
[40]
The reality is that, Mr Cawood was not
prohibited from selling tachy products, even though he was not
trained on them. The Applicant
submitted that during the third
quarter of the 2018 financial year, Mr Cawood had sold 47 brady
products in the amount of R 1 023 633
and three tachy
products in the amount of R 388 430. In 2019 he had sold six
tachy products. The brady product line is much
cheaper compared to
the tachy product line, which obviously enabled Mr Cawood to sell and
support more brady products. However,
Mr Cawood was able to sell
both, irrespective of the fact that he was not trained in tachy.
[41]
Mr Cawood was trained on brady products and
he sold those successfully. He cannot show how his ‘lesser
training’ or
absence of qualifications impacted on his ability
to operate as a sales representative of field and technical
consultant. More
importantly, his lesser training and qualifications
did not impact on his ability to forge relationships and build
customer connections.
[42]
Even on his version, he was only trained on
brady products, Mr Cawood conceded that a relationship was formed
with the relevant
doctors. The Applicant seeks to enforce the
restraint to avoid the exploitation of the relationship. Having
formed the relationship,
Mr Cawood indeed acquired a degree of
influence over the relevant doctors, which could work in his favour
and Biotroniks favour.
[43]
Mr Cawood’s argument that he could
not form a bond as strong as a representative who is qualified on
both brady and tachy
products as he is not the ‘complete
package’ does not hold water. His ability to forge
relationships and build customer
connections is the critical factor
and it was not dependent on the type of the products that he sold.
[44]
The Applicant is contractually entitled to
an opportunity for Mr Cawood’s replacement to develop an
equivalent relationship
with the relevant doctors.
[45]
Secondly, Mr Cawood is of the view that his
expertise ought not to be difficult to replace.
[46]
Mr Cawood stated that the period he
tendered (up to 31 August 2020) not to be involved with the relevant
doctors, is sufficient
to enable the Applicant to introduce a new
technical assistant or sales representative into the position he had
previously occupied,
for the new appointee to see the doctors and to
maintain a relationship with them. He emphasized that he could only
provide technical
support on brady products and due to his limited
training and absence of tertiary qualifications, his expertise ought
not to be
difficult to replace.
[47]
This argument is misplaced. The Applicant
seeks an opportunity to find a replacement, to train such a person
and to introduce him
or her to the Applicant’s products and
relevant doctors and to establish a relationship. It is not about the
replacement
of expertise or specifically Mr Cawood’s expertise,
but rather the establishment of customer connections and building a
relationship
with the relevant doctors and being afforded an
opportunity to do so.
[48]
Thirdly, Mr Cawood disputed that the
training which the Applicant provides is as extensive as set out in
the papers before me as
he was not trained as extensively by the
Applicant. His training at Biotronik will be over in three months,
where after he will
be able to start building relationships with
customers and the same should be possible for the Applicant.
[49]
According to Mr Cawood, it does not take
longer than three months to be fully introduced to the role players
involved in the ordering
of stock and three months, provide ample
time to introduce a new technologist or sales representative, for him
or her to prove
him or herself and to gain the confidence of the
relevant medical professionals or procurement officers.
[50]
The period of six months with no contact
with the relevant doctors, would provide the Applicant with a minimum
of 24 weeks to introduce
the new appointee and several opportunities
to maintain the Applicant’s relationship with them.
[51]
This is disputed by the Applicant.
[52]
In its replying affidavit, the Applicant
explained that prior to his transfer to the CRHF division, Mr Cawood
was employed as a
sales representative in the spine division and his
position as a field and technical consultant was similar to a
traditional sales
representative. While in the spine division, Mr
Cawood had already been trained on the basic skills and this enabled
his transition
into the CRHF division. Mr Cawood had received the
GNHC online certification and he underwent fundamentals and core
training. This
was not disputed by Mr Cawood.
[53]
It is therefore evident that Mr Cawood was
trained, albeit in his previous capacity and that there was no need
to train him again
extensively when he was transferred to the
Applicant’s CRHF division. The fact that he was not extensively
and specifically
trained as a field and technical consultant is of no
moment, given his prior training.
[54]
The Applicant explained that it provides
significant training to its representatives, who are required to
undergo extensive training
on the products which they will market,
promote and sell. The training is broken up into various modules
which are performed as
theory based and practical modules. The theory
based module is exclusively presented in the classroom with no
interaction with
cardiologists. The new representative is allocated a
coach during the practical aspect of the training and has limited
interaction
with the cardiologists. Only once the new representatives
have been certified by their coach as being ready to work
independently,
can they attend cases and work independently and
it is only then that the new sales representative will be in a
position to begin
to build meaningful relationships, which generally
takes a further six months. The training period is six months and
only after
this, can the representative begin to develop a
relationship with the cardiologists. Given the time it takes to
develop those relationships,
12 months is a minimum period for the
new sales representative to be trained and familiar with the
Applicant’s products and
to develop the necessary
relationships.
[55]
The Applicant submitted that it no longer
provides training on only certain products therefore Mr Cawood’s
replacement will
be trained on both brady and tachy products. There
is no curtailment of the time periods for training based on the
notion that
only brady training needs to be provided, as that is no
longer possible. The new training programme which the new field and
technical
consultant will be required to undergo, is broken up into
various modules and the programme takes nine months to complete. Only
between months seven to nine are candidates eligible for final
sign-off and are only then able to start the process of building
relationships and customer connections. It takes many months before a
new filed and technical consultant is familiar enough with
the
products and has a sound enough relationship with the cardiologist to
enable the consultant to compete effectively in the market.
This was
not disputed by Mr Cawood.
[56]
Furthermore, it takes time to recruit a
replacement to take over Mr Cawood’s account in the Inland
South Region and at the
time that the Applicant filed its replying
affidavit, a suitable replacement had not yet been found. Once a
replacement is found,
he or she will have to undergo induction and
training before he or she can service clients independently.
[57]
It was for these reasons that the Applicant
rejected Mr Cawood’s seven months tender. Based on the training
schedule, his
replacement would not even begin to build relationships
at the stage of seven months.
[58]
The Applicant’s case is that a period
of 12 months is necessary to provide the protection it needs in order
to train a replacement
for Mr Cawood and for that replacement to
develop his or her own relationships with the relevant doctors,
before Mr Cawood re-enters
the fray.
[59]
The Applicant submitted that it takes 12
months before a new sales representative is familiar enough with the
products and has a
sound enough relationship with the cardiologists
to enable such sales representative to compete effectively in the
market. Mr Cawood
disputed this and his version is that his training
at Boitronik would be completed within three months and he would be
able to
render services on his own from month three and form
relationships. His case is that to get someone trained to his level,
cannot
exceed three months.
[60]
Mr Cawood disputed the period of training
mainly on the basis that he was not trained extensively by the
Applicant and because his
training with Biotronik will take place in
three months, after which the introduction and relationship building
part of the business
would take place.
Conclusion
[61]
In my view, a restraint period of 12 months
is reasonable.
[62]
I say so for a number of reasons.
[63]
Firstly; The training that the Applicant
provides to its sales representatives and technical consultants does
not develop the customer
connection or build relationships with the
medical practitioners, but it rather equips them and propels them to
the point where
they are able to interact and build such
relationships and customer connections. It is not correct to consider
the training period
as part of the opportunity to develop a
relationship and build a customer connection.
[64]
In its replying affidavit, the Applicant
explained that it is difficult for a new field and technical
consultant to convince a cardiologist
to use a product sold by a
competitor where the cardiologist has an established relationship
with another field and technical consultant.
Conversely; it is easy
for a field and technical consultant who has an established
relationship with a cardiologist to convince
him or her to change the
product he or she uses as the products are similarly priced and are
often interchangeable. Mr Cawood did
not file an affidavit to dispute
this statement.
[65]
In order to protect its proprietary
interest in its relationship with the cardiologists to whom it sells
its products, the Applicant
needs to afford a new field and technical
assistant a period of time within which to be trained and thereafter
to build a relationship
with the cardiologists in his or her own
right.
[66]
This is more so where, on Mr Cawood’s
own version, he will attend training for three months and thereafter
will start to build
relationships and customer connections. It
follows that Mr Cawood would be able to establish customer
connections long before his
replacement is able to do so and he will
have the added advantage of having already established relationships
with the cardiologists,
when he was still employed by the Applicant.
There is a real likelihood that he would be actively marketing
products before his
replacement is certified and able to do so.
[67]
There is merit in the Applicant’s
concern that if Mr Cawood is only restrained for a period of six
months, there is a likelihood
that he may be actively marketing
products to the relevant doctors before his replacement is certified
to do so. In those circumstances
the relevant doctors will be faced
with Mr Cawood, with whom they have dealt previously, and his unknown
replacement, who did not
have sufficient time to establish a
relationship with the relevant doctors.
[68]
In short: the seven months’ period
tendered by Mr Cawood is wholly inadequate and not sufficient to
protect the Applicant’s
rights, more so where the risk of
exploitation of customer connections which were developed by virtue
of Mr Cawood’s employment
with the Applicant, is manifest.
[69]
I am satisfied that given the period it
takes to recruit and train a field and technical consultant as well
as the time it takes
to develop relationships and to build customer
connections in the field, a restraint period of 12 months is
reasonable.
[70]
Mr Cawood is restricted only for a limited
period of time from interacting with a limited list of doctors and
hospitals. The Applicant
is not seeking to enforce a restraint to
prevent him from participating freely in his chosen vocation. He can
remain in Biotroniks’
employ with the only prerequisite that he
does not exploit the Applicant’s customer connections.
[71]
Mr Cawood dismally failed to put any facts
before this Court to show that the period of the restraint that he
contractually agreed
to, was unreasonable.
[72]
The
period of the restraint that the Applicant seeks to enforce does not
go beyond what is reasonably required to protect its interests
relating to customer connections.
Costs
[73]
This Court has a broad discretion in
respect of costs.
[74]
In
Zungu
v Premier of Kwa Zulu-Natal and Others
[4]
the
Constitutional Court confirmed that the rule that costs follow the
result does not apply in labour matters. The Court should
seek to
strike a fair balance between unduly discouraging parties from
approaching the Labour Court to have their disputes dealt
with and,
on the other hand, allowing those parties to bring to this Court (or
oppose) cases that should not have been brought
to Court (or opposed)
in the first place.
[75]
The general accepted 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.
[76]
In
Public
Servants Association of South Africa on behalf of Khan v Tsabadi NO
and Others
[5]
it was emphasized that:‘…unless there are sound reasons
which dictate a different approach, it is fair that the successful
party be awarded its costs. The successful party has been compelled
to engage in litigation and incur legal costs. An appropriate
award
of costs is one method of ensuring that much earnest thought and
consideration goes into decisions to litigate in the Labour
Court,
whether as an applicant in launching proceedings or as a respondent
opposing proceedings.’
[77]
This is a case where the Court has to
strike a balance.
[78]
Mr Whitcutt for the Applicant submitted
that Mr Cawood should be ordered to pay the Applicant’s costs.
This is so because
he conceded that he was bound by the restraint of
trade, but came to Court as part of a bargaining process in respect
of the period
of the restraint. As far back as 21 January 2020, the
Applicant, via its attorneys, indicated that Mr Cawood could remain
in the
employ of Biotronik, provided that he gave certain
undertaking. Instead of providing an undertaking that he would step
away from
the relevant doctors for a period of 12 months, Mr Cawood
engaged in a horse trading exercise.
[79]
Mr
Whitcutt referred to the matter of
Meditronic
v Strydom
[6]
where
this Court made an order as to costs and he submitted that the same
principles and considerations should be applied
in
casu.
[80]
Mr Scheepers for Mr Cawood submitted that
the Applicant should be ordered to pay the costs as the tender Mr
Cawood made in February
2020, was reasonable. Alternatively, and if
the Court finds on the Applicant’s favour, there should be no
order as to costs
as Mr Cawood’s opposition was not
unreasonable, considering the facts of this case. I cannot agree.
[81]
In my view, this is a case where it is
appropriate to make a cost order. I reiterate:
A
cost order is a method of ensuring that decisions to litigate in this
Court are taken with due consideration of the law and the
prospects
of success.
[82]
Mr
Whitcutt referred to a plethora of Labour Court cases involving the
Applicant
[7]
and where this
Court has enforced a restraint of trade the period of 12 months. This
is not the first case involving the Applicant,
a competitor and an
employee who left for greener pastures and who wants to escape the
terms of the restraint. As to why this Court
is called upon yet again
to determine the self-same issue, is a pertinent question. One would
expect that by now, the principles
would be clear and that parties
would be able to understand and comprehend what those are. Yet, that
is not the case: Time and
time again they come knocking on the door
of this Court, with facts similar to previous cases, asking questions
no different from
those that have already been considered and
pronounced upon this Court.
[83]
Let this be a warning:
Pacta
servanda sunt
is a live principle and
provides that restraint agreements are enforceable, unless they are
unreasonable. The onus is on the party
seeking to avoid the restraint
to establish, on a balance of probabilities, that the restraint
agreement is unenforceable because
it is unreasonable. This Court has
enforced the Applicant’s restraint agreements for a period of
12 months on a number of
occasions. Any party seeking to avoid such a
restraint period, must have regard to previous judgments of this
Court and must consider
the facts and the findings of the Court
before coming here in an attempt to get a different outcome or to
escape the restraint
when there is no basis in law or on the facts to
do so.
[84]
This is a Court of law and not a forum
where parties are invited to come and renegotiate the terms of
agreements they freely have
entered into, nor is the type of horse
trading that is seen in applications such as this one, welcomed.
[85]
An appropriate award of costs is a method
of ensuring that much earnest thought and consideration goes into
decisions to litigate
in this Court. Litigating with no regard to
previous judgments on the same issue and with a clear intention to
escape the terms
of an agreement, without being able to attack the
reasonableness thereof, is conduct that this Court would not
tolerate.
[86]
This Court is ordinarily reluctant to make
orders for costs against individuals, for whom the prospect of an
adverse costs order
may serve to inhibit the exercise of what they
perceive as their rights. This is not an immutable rule.
[87]
I am alive to the fact that Mr Cawood is an
individual, but I cannot ignore the fact that he acted in breach of
his restraint agreement
when he took up employment with Biotronik,
that the Applicant made a reasonable concession to allow him to be
employed by Biotronik
and to seek a limited enforcement of the
restraint, and that his refusal to abide by the terms of the
agreement, led to this urgent
application. This application could
have been avoided had Mr Cawood had any regard to previous judgments,
the facts of his case
and his weak prospects of success.
[88]
Fairness dictates that the Applicant cannot
be expected to endure the costs of instituting litigation that ought
not to have been
instituted in the first place, but which had to be
instituted on an urgent basis due to Mr Cawood’s conduct.
[89]
In the present circumstances, the interests
of justice require that Mr Cawood pay at least a portion of the
Applicant's costs. In
my view, a sum equivalent to 50% of the
Applicant’s costs will best serve those interests.
[90]
In the premises, I make the following order:
Order
1.
The First Respondent is interdicted and
restrained from
disclosing, disseminating,
divulging, relaying or in any other way conveying the confidential
information of the Applicant to any
third party, including Biotronik;
2.
The First Respondent is interdicted and
restrained until 31 January 2021 and within the Republic of South
Africa, from directly
or indirectly, marketing, promoting, selling or
providing any technical support or being required by Biotronik to,
directly or
indirectly, market, promote, sell or provide any
technical support in respect of any products that compete with the
Applicant’s
CHRF product range to any of the following:
2.1.Life Flora Hospital:
2.1.2.
Dr Becker
2.1.3.
Dr Ho
2.1.3.
Dr Botha
2.1.4.
Dr Conradie
2.1.5.
Dr Peters
2.2.
Netcare Union Hospital:
2.2.1
Dr Theron
2.2.2
Dr Zamabakides
2.2.3.
Dr Mamdoo
2.2.4.
Dr Botha
2.3.
Vereeniging Hospital:
2.3.1.
Dr Skudicky
2.3.2.
Dr Mogogane
2.3.3.
Dr S Steyn
2.4.
Netcare Sunward Park Hospital:
Dr
Klug
2.5.
Life The Glynnwood Hospital:
2.5.1.
Dr Maharaj
2.5.2.
Dr Rost
2..5.3.
Dr Grogorov
2.5.4.
Dr Jardine
2.6.
Netcare Sunninghill Hospital:
Dr
Gebka
2.7.
Zuid Afrikaans Hospital:
Dr van Wyk
2.8.
Other hospitals:
2.8.1.
Dr Foccart
2.8.2.
Dr Nkwanazi
3.
The First Respondent is interdicted and
restrained until 31 January 2021 and within the Republic of South
Africa, for his own benefit
or for the benefit of Biotronik or any
other third party, from enticing, encouraging, inducing, persuading
or soliciting any employee
of the Applicant to leave the employ of
the Applicant;
4.
The First Respondent is to pay the costs of
the application, limited to 50% of the Applicant’s taxed costs,
to include the
cost of one counsel.
______________
Connie Prinsloo
Judge
of the Labour Court of South Africa
Appearances:
For the Applicant:
Advocate C Whitcutt SC with Advocate C de Witt
Instructed by:
Fasken Attorneys
For the Respondents:
Advocate G J Scheepers SC
Instructed
by:
Manong Badenhorst Attorneys
[1]
Unreported
case number J1945-15, ZALCJHB 451.
[2]
2007
(2) SA 406 (SCA).
[3]
See:
New
Justfun Group (Pty) Ltd v Turner and Others (
2018)
39 ILJ 2721 (LC).
[4]
(2018)
39 ILJ 523 (CC) at para 24.
[5]
(2012)
33 ILJ 2117 (LC) at p 2119 I-J.
[6]
See;
Medtronic
v Strydom and another
unreported
case number J 2187/19.
[7]
See:
Medtronic
Africa (Pty) Limited v Redelinghuys
under case no. J3364/12;
Medtronic
Africa (Pty) Limited v Kleynhans and Another
(2016)
37 ILJ 1154 (LC),
Medtronic
Africa (Pty) Limited v Van Wyk and Others
(2016) 37 ILJ 1165 (LC);
Medtronic
Africa (Pty) Ltd v van Rooijen and another, Medtronic v Strydom and
another
under
case number J 2187/19.