Benchmark Signs Incorporated v Muller and Another (J1153/16) [2016] ZALCJHB 238 (7 July 2016)

Benchmark Signs Incorporated v Muller and Another (J1153/16) [2016] ZALCJHB 238 (7 July 2016)

The court found that the restraint of trade clause, which imposed a three-year restriction across the entire Republic of South Africa, was unduly repressive and contrary to public policy. The applicant failed to lay a proper factual basis for partial enforcement of the restraint, as the request was raised only in the replying affidavit and without conceding the overbreadth of the original clause. The employee's skills prior to joining the applicant were limited, and the applicant's business model had changed, further undermining the justification for the restraint. Consequently, the restraint was found unreasonable and unenforceable.

Citation
[2016] ZALCJHB 238
Parties
Applicant: Benchmark Signs Incorporated; Respondent: Muller Daniel; Respondent: Seek Group (Proprietry Limited)
Court
Labour Court Johannesburg
Jurisdiction
South Africa
Judgment Date
7 July 2016
Case Number
J1153/16
Procedural Posture
Urgent Application / Application for Enforcement of Restraint of Trade Clause
Outcome
Application dismissed with costs.
Judges
Molahlehi
Legal Topics
Restraint of Trade, Confidential Information, Partial Enforcement, Reasonableness of Restriction
Labour Law Commercial and Corporate Restraint of Trade Confidential Information Partial Enforcement Reasonableness of Restriction

Case Brief

Summary, issues, holding and outcome

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Parties

Benchmark Signs Incorporated

Applicant

Muller Daniel

Respondent

Seek Group (Proprietry Limited)

Respondent

Procedural Posture

Urgent Application / Application for Enforcement of Restraint of Trade Clause

Legal Issues

  1. 1 Whether the restraint of trade clause in the employment agreement is reasonable in duration and geographic scope.
  2. 2 Whether the applicant is entitled to partial enforcement of the restraint clause.
  3. 3 Whether the employee breached the confidentiality and restraint undertakings.

Ratio Decidendi

The court found that the restraint of trade clause, which imposed a three-year restriction across the entire Republic of South Africa, was unduly repressive and contrary to public policy. The applicant failed to lay a proper factual basis for partial enforcement of the restraint, as the request was raised only in the replying affidavit and without conceding the overbreadth of the original clause. The employee's skills prior to joining the applicant were limited, and the applicant's business model had changed, further undermining the justification for the restraint. Consequently, the restraint was found unreasonable and unenforceable.

Court Disposition

Application dismissed with costs.

Orders

  • The applicant's application is dismissed with costs.