ARB Electrical Wholesalers (Pty) Limited v Ashley and Another (D683/17) [2017] ZALCD 20 (13 October 2017)

ARB Electrical Wholesalers (Pty) Limited v Ashley and Another (D683/17) [2017] ZALCD 20 (13 October 2017)

The court found that while the applicant had a protectable interest in its confidential information, the restraint of trade clause as drafted was unreasonably wide in both scope and geographic area. The restriction extended beyond the type of work performed by the first respondent and covered the entire Republic of South Africa, despite the respondent only working in Durban. This overbreadth rendered the restraint contrary to public policy, particularly in the context of South Africa's high unemployment rate. The court held that the applicant was entitled to protection of its trade secrets but not to a blanket prohibition on employment with competitors. Accordingly, the court granted...

Citation
[2017] ZALCD 20
Parties
Applicant: ARB Electrical Wholesalers (Pty) Limited; Respondent: Bhodraj, Ashley; Respondent: Moksa Electrical (Pty) Ltd
Court
Labour Court Durban
Jurisdiction
South Africa
Judgment Date
13 October 2017
Case Number
D683/17
Procedural Posture
Urgent Application / Final Relief Application
Outcome
Partial relief granted: protection of trade secrets enforced; restraint of employment and costs order dismissed.
Judges
Cele
Legal Topics
Restraint of Trade, Confidential Information, Employment Contract, Interdict, Unlawful Competition
Labour Law Commercial and Corporate Restraint of Trade Confidential Information Employment Contract Interdict Unlawful Competition

Case Brief

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Parties

ARB Electrical Wholesalers (Pty) Limited

Applicant

Bhodraj, Ashley

Respondent

Moksa Electrical (Pty) Ltd

Respondent

Procedural Posture

Urgent Application / Final Relief Application

Legal Issues

  1. 1 Whether the restraint of trade clause in the employment contract is enforceable against the first respondent.
  2. 2 Whether the scope and geographic ambit of the restraint is reasonable and justified.
  3. 3 Whether the applicant is entitled to an interdict restraining the first respondent from divulging trade secrets.

Ratio Decidendi

The court found that while the applicant had a protectable interest in its confidential information, the restraint of trade clause as drafted was unreasonably wide in both scope and geographic area. The restriction extended beyond the type of work performed by the first respondent and covered the entire Republic of South Africa, despite the respondent only working in Durban. This overbreadth rendered the restraint contrary to public policy, particularly in the context of South Africa's high unemployment rate. The court held that the applicant was entitled to protection of its trade secrets but not to a blanket prohibition on employment with competitors. Accordingly, the court granted...

Court Disposition

Partial relief granted: protection of trade secrets enforced; restraint of employment and costs order dismissed.

Orders

  • This matter is heard as a semi-urgent application.
  • The first respondent is interdicted and restrained from utilising and/or divulging and/or disclosing, whether directly or indirectly, any of the applicant's trade secrets to the second respondent or any other third party.