About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Cape Town Labour Court, Cape Town
SAFLII
>>
Databases
>>
South Africa: Cape Town Labour Court, Cape Town
>>
2025
>>
[2025] ZALCCT 1
|
|
Medtronic (Africa) (Pty) Ltd v Muller and Others (2024/128373) [2025] ZALCCT 1 (2 January 2025)
THE
LABOUR COURT OF SOUTH AFRICA
AT CAPE TOWN
Of interest to other
judges
case
no: C2024-128373
In
the matter between:
MEDTRONIC
(AFRICA) PTY LTD
Applicant
and
JEAN-PIERRE
MULLER
First
Respondent
CREATORI
HEALTH PROPRIETARY LTD.
Second
Respondent
Heard
:
4 December 2024
Delivered
:
2 January 2025
Summary:
(Restraint of trade – urgent –
Applicant adopting leisurely approach to urgency while exploring
settlement proposals
and in filing application once settlement
discussions were unsuccessful – struck off the roll for lack of
urgency)
JUDGMENT
LAGRANGE, J
Introduction
[1]
This is an application to enforce a restraint of trade brought on an
urgent basis, which is opposed by the First Respondent,
Mr
Jean-Pierre Muller (‘Muller’). The application was filed
digitally on CaseLines. The second respondent (‘Creatori’)
agreed to abide by the outcome.
[2]
The applicant (‘Medtronic’) seeks an interdict in the
following terms:
1. dispensing with
the forms and service provided for in the Rules of the above
Honourable Court and disposing of this matter
in such a manner and in
accordance with such procedure as it seems meet in terms of Rule 39
of the Rules of the above honourable
Court and permitting the matter
to be dealt with as an urgent application;
2. interdicting and
restraining the First Respondent from the date of the order until 18
July 2025 and within the Western
Cape Province, from:
2.1 being interested or
engaged, whether directly or indirectly, with the Second Respondent
in any manner whatsoever, whether as
a proprietor,
partner,shareholder, director, employee, agent, consultant, manager,
officer, executive, representative, financier
or otherwise, in the
promotion or sale of any products which compete with the products in
the Applicant’s Cranial Spine Technologies
portfolio;
2.2 being interested or
engaged, whether directly or indirectly, as a proprietor, partner,
shareholder, director, employee, agent,
consultant, manager, officer,
executive, representative, financier or otherwise, in any firm,
business or undertaking, which carries
on any activity, either solely
or in conjunction with any other party, in the promotion or sale of
any products which compete with
the products in the Applicant’s
Cranial Spine Technologies portfolio; and
2.3 approaching the
Applicant’s employees in order to induce them to leave
Applicant’s employ and to become interested
or engaged, whether
directly or indirectly, as a proprietor, partner, shareholder,
director, employee, agent, consultant, manager,
officer, executive,
representative, financier or otherwise, in any firm, business or
undertaking, which carries on any activity,
either solely or in
conjunction with any other party, in the promotion or sale of any
products which compete with the products
in the Applicant’s
Cranial Spine Technologies portfolio.
3. Interdicting and
restraining the First Respondent from:
3.1 disclosing,
disseminating, divulging, relaying or in any other way conveying the
Applicant’s confidential information
to any third party,
including the Second Respondent; and
3.2 using, disclosing,
disseminating, divulging, relaying or in any other way conveying the
Applicant’s confidential information
for the purpose of
promoting or selling of any products which compete with the products
in the Applicant’s Cranial Spine
Technologies portfolio.
4. Ordering the First
Respondent to pay the Applicant’s costs save in the event of
opposition by the Second Respondent, in
which case ordering the
Respondents who oppose the application to pay the costs, one paying
the other being absolved.”
[3]
In keeping with provisions of Rule 39 of the Labour Court rules,
which makes allowance for the filling of a supplementary
(fourth)
affidavit by the respondent in restraint applications, four
affidavits were filed.
Background
[4]
Muller has been employed by Medtronic since 1 June 2010 until he was
retrenched on 31 August 2024, following a short period
of ‘garden
leave’. His final working day was 18 July 2024.
[5]
It is common cause that his contract of employment contained a
confidentiality and restraint of trade clause, which imposed
on him
all the obligations described in the relief sought, except that the
geographic scope of the restraint in his contract encompasses
the
entire country and the prohibition of competitive activities is not
confined to the cranial spine technologies (‘CST’)
portfolio of Medtronic.
[6]
In May and June, Medtronic underwent a restructuring process which
led to Muller’s retrenchment. A retrenchment
agreement was
concluded with employee representatives on 20 June 2024. Both parties
accept that it governed Muller’s retrenchment
though their
interpretation of two clauses were at odds with each other.
[7]
Clauses 9.1 and 9.2 of his retrenchment agreement state that:
“
9.1
The restraint
of trade provisions in terms of the
affected employees’ employment contracts with the company shall
remain in place should
the affected employee be retrenched pursuant
to this agreement where the affected employee declined any offer re-
or alternative
employment by the company or any of its affiliates.
9.2
In the event that
there are no alternatives to retrenchment
and the affected
employee is retrenched,
the company will consider
waiving or
limiting the scope of the application of the restraint, taking into
consideration the affected employee’s current
business and
customer base.
Where a restraint is waived or the scope of its
application is limited, a specific agreement will be concluded with
the employee
in writing
.”
(capitalisation removed,
emphasis added)
[8]
Muller contends that clause 9.1 implies
that he is not bound by the restraint because he was not offered
alternative employment.
Whether there was an offer of
alternative employment made to him by Medtronic is a matter of
dispute. He insists that he had to
reject an offer, which had been
made to him formally in writing. Failing that, clause 9.1 did not
apply to him. Medtronic maintains
two other jobs were mentioned to
him as possible alternatives, but he made it clear, he was not
interested. Muller admits discussions
on two positions took place,
but claims Medtronic advised him he was not suitable for one of them.
In any event, Medtronic argues
that even if he was not offered
alternative employment, before he could be released from the
restraint obligations it was its own
decision whether to waive the
restraint wholly or in part and conclude a specific written agreement
with him. As this never happened,
the restraint provisions remain
applicable after his retrenchment. This issue will be dealt
with further below.
[9]
At the time of his retrenchment, Muller was
the territory manager of the Western Cape. In that capacity, he was
only responsible
for Medtronic’s neuroscience and neurosurgery
portfolio, which included the spine portfolio.
Despite
acknowledging his responsibility for the specialised portfolio
described,
Muller says he is at a loss to know
which products and technology fall within the ambit of such a
portfolio.
[10]
Muller maintains that since he held this
position from June 2021 he no longer developed or maintained
relationships with doctors
for whom he was previously responsible. In
that role, he claims he no longer had ‘access’ to his
former customer connections.
Medtronic accepts that his interaction
with customers as a sales representative might have diminished, but
that did not end the
relationships he had with them. In fact, in an
email dated 18 July 2024, in which he provided information on his
role and functions
as “
District
sales manager for Western Cape, Neuroscience”
he had identified “
meetings with
key decision makers
” (“
e.g.
surgeons”
) and “
maintaining
and improving strong customer relations”
,
amongst other things, as part of his job responsibilities. The
purpose of the email was to assist Medtronic to draw up a work
reference letter for Muller, though he disavowed its significance as
an indication of what he did. Another document makes reference
to him
accompanying a sales representative on visits to doctors, which he
does not dispute but maintained it was not a regular
occurrence.
Evaluation
Urgency
[11]
Medtronic claims that it first became aware
that Muller was acting in breach of his restraint agreement in early
September 2024
when it was advised that he had been seen visiting
doctors at Cape Gate Mediclinic Hospital in the company of Creatori’s
spine national sales manager. On 10 September 2024 its lawyers wrote
to the respondents claiming that Muller had taken up employment
with
Creatori in breach of his restraint agreement and sought undertakings
from Muller to terminate his breach and comply with
the provisions of
the restraint. The following day Creatori responded, asking for
details of the circumstances of Muller’s
termination and
whether the restraint was discussed during retrenchment discussions.
It also claimed that Muller was not an employee
and the agreement it
had concluded with him was an “
independent
contractors agreement
”.
Creatori’s letter was followed by a letter from Muller on 12
September 2024 in which he stated that he was an independent
contractor to several companies. He also asserted that clause 9.1 of
the retrenchment agreement was inapplicable to him and requested
Medtronic to honour the agreement and agree to waive or limit the
restraint. Medtronic replied on 13 September rejecting his
interpretation
of the agreement and pointing out that even if he was
an independent contractor he was still in breach of the restraint. It
extended
the ultimatum it had issued for him to adhere to the
restraint until 17 September. Creatori was copied with the letter.
Muller
requested until 20 September to consider the undertaking
sought and undertook not to use confidential information in the
meantime.
The requested extension of time was acceded to by
Medtronic. When Muller responded on 20 September, he advanced various
reasons
why he was not bound by the restraint. He declined to agree
not to be involved in any entity which competed with Medtronic, nor
would he agree not to sell or promote similar products to those
offered by it. Nonetheless, he undertook not to approach any of
its
clients it had dealt with during the three years prior to his
retrenchment. The last-mentioned undertaking was nevertheless
subject
to a proviso that he would not turn away Medtronic’s clients
who approached him to do business with any entity he
was involved
with. He also undertook not to try and entice employees to leave
Medtronic and not to disclose any of its confidential
information to third parties.
[12]
Medtronic’s view was that such
undertakings were of little value if he was free to sell competing
products of Creatori to
the same customers, he was previously
acquainted with at Medtronic. Muller maintains that the confidential
information he had access
to was so complex and intricate it would be
impossible to reduce it to memory. Medtronic rejects this assertion
and states that
his knowledge, particularly of its business
strategies for its spine and neuro-technology business units is not
beyond the capacity
of a person to remember. Furthermore, he
would have been very familiar with these, because he was responsible
for preparing
some of the strategies to expand Medtronic’s
Western Cape business.
[13]
Medtronic responded to Muller’s
letter only on 30 September, ten days later. Medtronic disputed
various claims made
in Muller’s letter but mentioned that it
viewed his undertakings as the beginning of a basis for a compromise
that would
enable it to protect its interests without resorting to
litigation. It made a counter-proposal with the following terms:
Muller
would agree not to sell or promote products, which competed
with Medtronic’s CST products to 49 named doctors working at 22
medical facilities; he would not be able to assist such doctors even
if they approached him; he would not be able to advise or
assist any
other person in the sale or promotion of such products and, would not
disclose or utilise Medtronic’s confidential
information in his
work for Creatori. The offer remained open to 3 October, failing
which Medtronic would launch an application.
[14]
Further correspondence ensued and a draft
settlement agreement was under consideration by the parties. By
16 October, Medtronic
reluctantly agreed to amendments proposed by
Muller, save that it would not accept his proposal to excise the
names of 14 doctors
at five clinics from the list of doctors he would
not be able to have dealings with. It disputed his claim that these
doctors were
ones he had no prior relationship with, when in fact he
had close associations with them. Medtronic’s proposal was
tabled
on a ‘with prejudice’ basis and it remained open
for acceptance even at the hearing of the urgent application.
Obviously,
the offer was not accepted. However, it still took
another three weeks before the application was launched.
[15]
Because of the provisions of Rule 39 and
the practice that restraint applications are ordinarily not enrolled
during recess, Medtronic
set out a slightly truncated version of the
Rule 39 timetable for filing of subsequent affidavits, so the
application could be
heard in the last week of term. Muller
complained that this violated Rule 39 and the application should be
struck off the roll
for this reason alone. He also argued that any
justification for a more truncated period was created by Medtronic’s
own delay
in launching the application.
[16]
Rule 39(3) provides that an applicant
should allow respondents in urgent restraint applications, 7 days to
file an answering affidavit,
and should file any replying affidavit 5
days later. The respondents then should be permitted 5 days to file a
supplementary affidavit.
In this instance, the applicant allowed 3
days to file a notice of opposition, which is not a required step
under the Rule. It
still gave the respondents 7 days to file any
answering affidavit, but only 3 days to file its own replying
affidavit. The
respondents were then afforded 4 days to file
any supplementary one.
[17]
Rule 39(1) states:
“
(1)
Unless circumstances warrant a more urgent hearing, an application in
restraint of trade will be enrolled
only where the procedure outlined
below has been strictly adhered to by the applicant.”
[18]
Effectively, the only truncation of the
timetable set out in Rule 39 was to allow two days less for filing a
replying affidavit
and one day less for filing a supplementary
affidavit. These deviations from the time periods laid down in the
Rule were minimal
and, bar one day, potentially more detrimental to
Medtronic than to Muller. This slight infraction of the rule was to
ensure the
application was heard before the end of term.
Although no formal application was made to be excused the slight
curtailment
of Rule 39 time periods, I do not think that any material
prejudice was suffered by Muller as a result and the abbreviated
timetable
set out in the notice of motion should be condoned.
[19]
The question that remains is whether the
delay between Medtronic discovering Muller’s alleged breach of
the restraint and
launching the application is acceptable. In
general, u
rgent applications are justified when the right an
applicant is entitled to enforce cannot be effectively realised if it
follows
the normal timetable for initiating and prosecuting a claim
in the ordinary course of motion or trial proceedings.
[20]
In the case of restraint applications, the right an applicant
wishes to enforce is the right to compel the respondent to comply
with the terms of the restraint, which amounts to an order for
specific performance. Suing for damages flowing from a breach in
due
course by means of an action is a cumbersome and invariably more
costly way of obtaining some recompense but is not a direct
nor
effective way of realising to the employer’s contractual right
to enforce the terms of the agreement and halt the unlawful
action
from continuing. Waiting for an application for enforcement to be
enrolled in the ordinary course is normally considered
inappropriate
because the restraint is likely to be near its expiry date by the
time the application is heard.
[21]
The
inability of obtaining substantial relief in due course is a weighty
factor in favour of granting urgent relief, because to
deny it
effectively bars an applicant from accessing their primary remedy.
Doubtless this is one reason why it is recognised that
applications
to enforce restraint of trade agreements are considered inherently
urgent in nature
[1]
, another
reason possibly being their limited duration
[2]
.
[22]
Factors which might nonetheless preclude the success of an
urgent application include whether the urgency is self-created,
whether
respondents might suffer any procedural prejudice or whether
the administration of justice may be prejudiced.
[23]
Muller
contends that any urgency in this matter is self-created. In
Ecolab
(Pty) Ltd v Thoabala & another
[3]
this
court emphasised that the inherently urgent nature of restraint of
trade applications, does not exempt an applicant from acting
promptly
to launch an urgent application:
:[16] The applicant’s
approach in this case in regard to the issue of urgency was that the
enforcement of confidentiality
and restraint undertakings is a matter
that should be treated as inherently urgent, and that what was
required was for it to prove
that Thoabala is in breach. It was
further submitted on its behalf that it did not matter how long the
respondents had been in
breach, and that what mattered was when the
applicant discovered that there was a breach. Mr Donaldson for the
applicant further
submitted that it was not required of the applicant
to present a substantial explanation as to the reason the matter
should be
accorded urgency. There are obvious fundamental problems
with this approach, which in my view is either a misinterpretation or
misunderstanding of the acceptance by Davis J in Mozart Ice Cream
Classic Franchises (Pty) Ltd v Davidoff & another that breaches
of restraint of trade undertakings have an inherent quality of
urgency.
[17] One cannot quarrel
with the conclusion that there is indeed inherent threat and
prejudice to an employer whose ex-employee
flagrantly fails to comply
with his or her confidentiality and restraint of trade undertakings,
and particularly one that immediately
joins a competitor. At the same
time however, I did not understand the import of Mozart Ice Cream to
be an erosion of the requirements
of rule 8 of this court’s
rules, read together with clause 12 of the Practice Manual of this
court, 8 or worst still, to
imply that these disputes should enjoy
special privileges in this or any other court.
To hold otherwise
would lead to absurdity and unmitigated abuse of court processes, in
that any party aggrieved by alleged non-compliance
with restraint
provisions may fold its arms and approach a court at its leisure, and
long after the alleged breach, to seek urgent
intervention
.
In
such circumstances obviously, any urgency claimed will be regarded as
self-created.
The court should therefore refuse to assist an
applicant who approaches it for urgent relief at its leisure and then
claims that
it did not matter how long it had known of the alleged
breach.
[18] It is my view that
even if breaches of restraint of trade may have an inherent quality
of urgency, these disputes cannot by
mere virtue of that quality, be
treated any differently from any other disputes that randomly come
before this court on an urgent
basis. Thus, for example, an employer
faced with the prospects of unprotected strike action is entitled to
approach this court
on an urgent basis, in the same way as is a union
threatened with a mass dismissal of its members flowing from
participation in
a protected strike. There can be no doubt that these
disputes in view of the consequences that flow from the threat or
actual conduct
in question, also have an element of inherent urgency
about them.
[19] In a nutshell
therefore, there is nothing inherently special or unique about
restraint of trade disputes that makes them deserve
more urgent
attention from this court than other disputes. To hold otherwise
would equally be contrary to the tenets of s 9(1)
10 of the
Constitution of the Republic, 11 read together with s 34. 12 Thus,
all disputes that come before the court on an urgent
basis should be
treated equally, without giving preference based on their nature,
with the only distinguishing factor being whether
the requirements in
rule 8 have been met.
[20]
To summarise then, parties alleging breaches of restraint of trade
agreements are not indemnified from satisfying the requirements
in
rule 8. Thus, a mere contention that the enforcement of a restraint
of trade is inherently urgent and therefore must be treated
as such
by this court without any further consideration cannot by all
accounts be sustainable. The fact that these disputes may
have an
inherent quality of urgency cannot be equated to a free pass to
urgent relief on the already over-burdened urgent roll
in this court.
Like all other urgent matters, more than a mere allegation that a
matter is urgent is required. This therefore implies
inter alia that
the court must be placed in a position where it must appreciate that
indeed a matter is urgent, and also that an
applicant in the face of
a threat to it or its interests had acted with the necessary haste to
mitigate the effects of that threat
to it or its interests had acted
with the necessary haste to mitigate the effects of that threat.”
[24]
In
a similar vein, it was held in
Vumatel
(Pty) Ltd v Majra & others
[4]
that:
“
[23]
In the case of restraints of trade, to what extent the applicant’s
failure contributes to the inability to obtain substantial
redress in
due course is an especially important consideration where it comes to
urgency. This is because the clock starts ticking
as soon as the
employee leaves employment. It follows that as soon as the employer
realises that there is a possible violation
of the restraint, it must
act promptly. If the employer does so, it would be able to
successfully argue that the possibility of
the restraint period
expiring before the matter can be heard in the ordinary course is not
due to its own doing. This kind of consideration
would be why this
requirement is inextricably linked with the other requirements of
urgency in the case of restraints.
[24] The court is not
saying that when an employer realises there is a violation of the
restraint of trade, an application must
be launched yesterday. This
court has said that it is advisable to first try to avoid litigation
by demanding compliance and seeking
an undertaking to comply. But at
best, this kind of pre-emptive approach can account for a period of a
week or two in the whole
scheme of things. I do not attach a specific
time period to this, as it would naturally depend on the interaction
between the parties,
and the particular facts of the case.”
[25]
In
National
Union of Metalworkers of SA & others v Bumatech Calcium
Aluminates
(2016) 37
ILJ
2862 (LC) the Court held:
“
[26]
Urgency must not be self-created by an applicant, as a consequence of
the applicant not having brought the application at the
first
available opportunity. In other words, the more immediate the
reaction by the litigant to remedy the situation by way
of
instituting litigation, the better it is for establishing urgency.
But the longer it takes from the date of the event
giving rise to the
proceedings, the more urgency is diminished. In short, the applicant
must come to court immediately, or risk
failing on urgency. In
Collins t/a Waterkloof Farm v Bernickow NO & another the court
held that —
'if
the applicants seeks this court to come to its assistance it must
come to the court at the very first opportunity, it cannot
stand back
and do nothing and some days later seek the court's assistance as a
matter of urgency'.”
[5]
[26]
This means that applicants in restraint of trade matters, must
act expeditiously in launching the urgent proceedings. In doing so
they also need to bear in mind the length of time before the matter
can be enrolled for a hearing taking account of the time periods
set
out in Rule 39.
[27]
In this instance Medtronic initially acted
promptly on 10 September once it learnt of Muller’s visit to
Cape Gate Medical
Hospital with Creatori’s national sales
manager. By 12 September it already had confirmation that he was
working for Creatori,
albeit allegedly as an independent contractor,
which nevertheless would have put him in breach of the provision in
his restraint
agreement prohibiting him from being in any way
involved in an entity promoting the sale of competing products. After
indulging
Muller with an extended ultimatum to comply with the
restraint, Medtronic knew on 20 September that he would not
discontinue working
with Creatori, and that even though he would not
approach former clients he had dealt with in the preceding three
years, he would
deal with them if they approached him. He said he
would honour his confidentiality obligations. Medtronic felt this was
of little
comfort if he was still free to deal with former clients
who approached him.
[28]
It took Medtronic a full ten days to
respond with a modified proposal, the gist of which was to pin down
the identity of former
clients, whom he would not assist under any
circumstances. Two further weeks’ passed at the end of which
they could not agree
on the inclusion of 14 doctors and a final
proposal was tabled by Medtronic and left open for acceptance by
Muller. The application
was only launched three weeks later. It took
nearly a month to enrol the matter because of the provisions of Rule
39, which Medtronic
only sought to minimally curtail so it could have
the application enrolled before the recess. The upshot is that
nearly three
months has passed since the breach had taken place by
the time the matter was heard.
[29]
I accept that the parties appear to have
been genuinely engaged in trying to settle the matter without
litigating, but Medtronic
showed no sense of urgency in the conduct
of the discussions, which proceeded at a relatively leisurely pace,
added to which it
took inordinately long to file the application
after making its final offer, so that nearly two months had passed
since it came
to have knowledge of the breach and the launching of
the application. The urgency of the application cannot be determined
by the
time it takes to exhaust settlement discussions. By the time
it was enrolled for hearing nearly three months had passed since
Medtronic
was alerted to the breach.
[30]
In the circumstances, I am not satisfied
that Medtronic approached this court with sufficient urgency and it
falls to be struck
off the roll for that reason. This being an
essentially contractual matter, there is no reason for costs not to
follow the result.
Order
[1]
The application is struck off the roll for lack of urgency, with
costs.
R Lagrange
Judge
of the Labour Court of South Africa
.
Parties’
Representatives:
For
the Applicant
L
Frahm-Arb of Faskens
For
the First Respondent
J
P Steenkamp instructed by GVS Law
[1]
Mozart
Ice Cream Classic Franchises (Pty) Ltd v Davidoff & another
(2009) 30
ILJ
1750 (C) at 1761.
[2]
See
Vumatel
(Pty) Ltd v Majra & others
(2018) 39
ILJ
2771 (LC) at paragraph 21.
[3]
(2017) 38
ILJ
2741
(LC)
[4]
(2018) 39
ILJ
2771
(LC)
[5]
Cited with approval in
Radebe
and Others v Aurum Institute
(2024) 45
ILJ
876 (LC) at paragraph [17].