Gilbarco AFS (PTY) Ltd t/a Gilbarco Mea v Hattingh and Others (J 1134/2022) [2022] ZALCJHB 149 (25 October 2022)

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Not Reportable

Case No: J 1134/2022

In the matter between:

GILBARCO AFS (PTY) LTD t/a GILBARCO MEA Applicant

And

THEO HATTINGH

First Respondent

COMMERCIAL & MINING SERVICES (PTY) LTD

Second Respondent

COMMERCIAL FUEL MANAGEMENT (PTY) LTD t/a

Third Respondent

THE FLUIDS LAB

Heard: 14 October 2022

Delivered: 25 October 2022

(This judgement was handed down electronically by circulation to the parties’ legal representatives, by email, publication on the Labour Court’s website and released to SAFLI. The date on which the judgment is delivered is deemed to be 25 October 2022.)

JUDGMENT

VAN NIEKERK, J

Introduction

[1] The applicant conducts business in the supply of fuel management technologies, solutions and services throughout Southern Africa. The applicant avers that since 2019, it has sought to develop what it describes as a clean fuel solution for supply to customers, most of whom are large-scale users of fuel, including mining operations. The clean fuel solution allows the applicant’s customers to monitor the extent of particles in the fuel which they utilise in the operation of their businesses, and provides them with real-time data analytics and metrics in relation to the quality of their fuel and the particles contained in the fuel. The applicant’s customers are thus enabled to make strategic decisions in relation to their fuel use and the maintenance of their machinery and in particular, the frequency with which they change filtration devices and injectors installed in that machinery.

[2] The applicant employed the first respondent (Hattingh) in November 2014. Hattingh resigned from the applicant’s employ on 31 January 2022, in circumstances where during the two-year period prior to his resignation, he was employed in the role of business development manager. The applicant avers that in this capacity, Hattingh was engaged in all aspects of the development of the applicant’s

clean fuel solution, and was privy to its strategy for the development and deployment of that solution.

[3] The applicant states that it recently came to its attention that Hattingh had teamed up with the second respondent (CMS) and/or the third respondent to manufacture a clean fuel solution, and to extract orders and sales from the applicant’s customers for a competing product. By doing so, the applicant contends that Hattingh is in breach of the terms of restraint and confidentiality undertakings, given by him in favour of the applicant as a term of his contract of employment concluded on 6 November 2014.

[4] In these proceedings, brought on an urgent basis, the applicant seeks to enforce the restraint and confidentiality undertakings. Hattingh opposes the relief sought on the basis that the application is not urgent, that he is not in breach of his restraint and confidentiality undertakings, and that the restraint that the applicant seeks to enforce is in any event unreasonable.

[5] Neither the second nor the third respondents oppose the application; the third respondent has filed a notice to abide by the decision of the court.

Urgency

[6] The applicant states that on 6 September 2022, it received firm and incontrovertible evidence that Hattingh was engaged by CMS, a direct competitor to the extent that it had developed a clean fluids controller and a fuel management system in direct competition with the applicant’s business. The present application was filed on 5 October 2022, after Hattingh had been requested on 16 September 2022 to provide undertakings to comply with the restraint agreement.

[7] Hattingh disputes that the application is urgent. Counsel did not dispute that as a general rule, applications to enforce restraint undertakings have an inherent quality of urgency. He referred to Boomerang Trade CC t/a Border Sheet Metals v Groenewald & others [2012] ZAECELLD (18 September 2012), where the court restated the principle that proceedings for the enforcement of the restraint of trade agreement are by their very nature urgent, since they invariably seek to interdict ongoing unlawful action in respect of which an applicant suffers financial losses (at paragraph 36 of the judgment). Counsel submitted that the applicant had failed to set out any basis on which the application should be heard at such short notice, and why it could not wait its time on the ordinary roll. Further, counsel submitted that the applicant has created its own urgency, having been fully aware since March 2022 that he had been developing the fluid solution that is the subject of these proceedings.

[8] The present application was served late on the night of 28 September 2022. On 29 September 2022, all of the respondents confirmed receipt of the application. Any respondents intending to oppose the application were afforded an opportunity to file an answering affidavit by no later than 6 October 2022; the applicant undertook to file a replying affidavit by close of business on 10 October 2022. The respondents were specifically afforded an opportunity to file a fourth affidavit (if any) by close of business on Wednesday, 12 October 2022. The application was enrolled for hearing on 14 October 2022.

[9] To the extent that Hattingh’s complaint is that he was prejudiced in relation to the time afforded to him to file an answering affidavit, the truncated time limits stipulated by the applicant in its notice of motion were not unreasonable, having regard to the exigency of the matter. In so far as Hattingh states that he was not afforded an opportunity to respond to new matter raised in the replying affidavit, this is not unusual, given the operation of the onus of proof in restraint disputes. Hattingh’s complaint is addressed by the fact that was specifically invited to file a fourth set, which he elected not do.

[10] To the extent that Hattingh submits that any urgency is self-created, and in particular, that the applicant was aware from February 2022 that he had joined CMS, there is no reason to call into question the evidence of Mr. Luyt, the applicant’s executive for operations, that he had had conversations with a Mr. Maharaj of CMS after Hattingh’s resignation, who at no point advised him that Hattingh had started The Fluid Lab under the auspices of CMS, or that he was employed by or involved with CMS. It was only in July 2022 that Maharaj informed Luyt that CMS had revived its initiative to build a controller/integrator that would integrate with particle counters for the purposes of a clean fuel solution, and that Hattingh had been approached to work with CMS on a clean fuel solution. At that stage, Maharaj stated that Hattingh was ‘considering the offer’. This version stands in stark contrast to that deposed to by Hattingh, who states that he became involved in the business of CMS in February 2022, shortly after he had resigned from the applicant’s employ, in circumstances where he does not dispute that he stated at the time that he intended to take some time off and become involved in strategic plan development, IT, and business turnaround and sale enablement assignments. There is also no reason to reject Luyt’s evidence that as far as the applicant was concerned, Hattingh’s involvement with CMS was only finally and unequivocally confirmed on 6 September 2022. In these circumstances,

the applicant acted with due diligence in seeking to protect its rights.

[11] In any event, one of the fundamental considerations in any assessment of urgency is the ability of the applicant to obtain the relief it seeks in the ordinary course. It is a matter of public record that the opposed motion roll is full until the end of 2023, a month prior to the expiry of the restraint that the applicant seeks to enforce.

[12] For all of these reasons, I am satisfied that the application is urgent and thus falls to be dealt with on that basis.

Factual background

[13] The relevant elements of the restraint read as follows (own emphasis):

3 RESTRAINT

3.1 The Employee undertakes in favour of the employer and its successors in title and assigns that she/he shall not at any time during the period of employment, and shall not, in the area and for a period of two (2) years as following the termination of her/his employment for any reason whatsoever:

3.1.1 compete or be concerned or associated with, engaged, employed or interested in any manner whatsoever in any business similar to or competing with the business;

3.1.2 directly or indirectly solicit or seek to obtain for him or herself or any other person, entity, firm, corporation or institution, whether he or she is associated with such person, entity, firm, corporation or institution or not, inquiries orders for any services or product which falls within the ambit of the business.

3.1.3 directly or indirectly solicit, canvass, accept or be interested in any benefit from any person, whether in money or otherwise, for any product or service which is supplied, sold, furnished or otherwise made available by the employer to any person or concern who either at the date of termination of the employee services or at any time during the two (2) years he has immediately preceding such date was a customer or supplier of the employer. The expression “customer”

shall in this case be deemed to include prospective customers whose business was the subject of negotiations with the employer at any time within a period of two (2) years he has prior to the date of termination of the employees (sic) employment with the employer;

3.1.4 encourage, entice, persuade or induce any employee of the employer to terminate his or her employment with the employer and nor shall the employee employ such employee;

3.1.5 reverse engineer any of the products supplied by the employer.

[14] For the purposes of interpretation of clause 3.1.3 of the restraint, the expression “customer” is deemed to include prospective customers whose business was the subject of negotiations with the applicant at any time within the period of two years prior to the termination of Hattingh’s employment.

[15] Clause 2.2 of the confidentiality and restraint of trade agreement defines “The Business” in the following terms (own emphasis):

2.2 “The Business” means:

2.2.1 the supply, installation and/or maintenance of automatic fuel gauging systems;

2.2.2 the supply, installation and or maintenance of electronic leak detection systems in the fuel industry and/or

2.2.3 the supply, installation and/or maintenance of an electronic fuel management system;

2.2.4 the supply, installation and/or maintenance of vehicle identification units.

[16] In terms of clause 4.1 of the restraint, Hattingh agreed that he would not use or infringe any of the applicant’s confidential property, intellectual property or protectable interests for any reason whatsoever, unless that use was during his employment and made with the prior written consent of the applicant. Further, Hattingh undertook not to divulge or disclose to any third party any of the applicant’s confidential information. The term “confidential information” is defined to include information that is confidential to the applicant, its trade secrets, client lists, pricing, costing and pricing structure, contact details of its customers, methodologies developed by the applicant and used by to conduct business, and confidential information and trade secrets of the applicant’s clients.

[17] As I have indicated, Hattingh does not dispute that he signed the restraint undertakings on 6 November 2014. He does not dispute his involvement in The Fluid Labs or CMS; indeed, Hattingh records that he commenced employment with CMS in February 2022 and that from its inception, The Fluid Lab has been a division of CMS and part of its brand. Hattingh states further that CMS, with his assistance, has developed an IIOT (Internet of Things) solution which deals with fuels, lubricants, water and chemicals. Hattingh contends that this solution is a ‘completely different product’ with a much wider application, and that it bears no relationship to the product under development by the applicant. The product developed by CMS is described as an ‘overall fluids management solution’ as opposed to a ‘clean fuel solution’. That notwithstanding,

Hattingh records that ‘As it so happens, this product also has the ability to assist in the fuel industry’.

[18] Hattingh also does not dispute that the applicant’s business is the supply of fuel management technologies and services throughout South Africa. He states that while employed by the applicant he did substantial work to attempt to find an IIOT solution and attempted to ‘punt’ IOTT systems, but that the systems were not ‘properly’ pursued by the applicant. In essence, Hattingh avers that he attempted to develop a clean fuel solution for the applicant, but that it did not come to fruition.

[19] Hattingh does not dispute that while employed by the applicant, he had relationships with mining companies, nor does he dispute that mining companies are major clients of the applicant.

[20] Hattingh denies that by taking up employment or being engaged with CMS, he is in breach of his restraint undertakings. First, he contends that the definition of ‘business’ is insufficiently broad in scope to encompass his current activities. Secondly, he contends that the applicant does not compete with CMS because the applicant does not have an IIOT clean fuel solution, with the consequence that the IIOT clean fuel solution that CMS has developed, with his assistance, does not compete with the business of the applicant. Further, while Hattingh admits that he was involved in substantial work on an IIOT clean fuel solution during the period that he was employed by the applicant, he contends that the solution was dependent on the signature by the applicant of a distribution agreement with Donaldson Filtration Systems (Pty) Ltd (Donaldson), an agreement that the applicant failed to secure.

[21] Finally, Hattingh submits that the applicant has no protectable proprietary interest in any confidential information in relation to its IIOT clean fuel solution, because that confidential information is proprietary to Donaldson and Reynolds Contamination Control (Pty) Ltd.

Issues in dispute

[22] The applicant bears the onus to demonstrate that Hattingh is bound by the restraint undertakings, and that he is in breach of those undertakings. Thereafter, the onus shifts to Hattingh to prove that he did not hold customer connections on behalf of the applicant and that he was not privy to its confidential information, and further, that the enforcement of the restraint undertakings against him would thus be unreasonable and against public policy.

[23] The issues that the court is required to decide are thus:

1. whether clause 2.2 of the restraint agreement precludes Hattingh from being involved with The Fluids Lab and engaged by CMS;

2. whether, as a matter of fact, the strategic information to which Hattingh admits that he was privy, is protectable in the applicant’s hands because it belongs to third parties; and

3. in the event that Hattingh is found to be in breach of his restraint undertakings, whether he has discharged the onus to prove the restraint undertakings are unreasonable.

Applicable legal principles

[24] It is generally accepted that a restraint will be considered to be unreasonable (and thus contrary to public policy and unenforceable), if it does not protect some legally recognisable interest of the employer but merely seeks to exclude or eliminate competition. Ordinarily, a restraint will be unenforceable if it does not protect a trade connection and/or confidential information to which the ex-employee was exposed. (For a summary of the relevant principles, see the judgment of the Labour Appeal Court in Labournet (Pty) Ltd v Jankielson & another (2017) 38 ILJ 1302 (LAC) at paragraphs 39 to 45.))

[25] It warrants emphasis that in an application such as the present all the applicant needs to is show that there is confidential information to which the employee had access and which he or she could transmit if so inclined. It is not necessary to show that the employee has in fact used information confidential to the applicant. Similarly, in relation to customer connections, it is necessary to do no more than show that trade connections through customer connections exist, and

that they could be exploited by the former employee if employed by a competitor (see Den Braven SA (Pty) Ltd v Pillay and Another 2008 (6) SA 229 (D) at 240H).

[26] In Basson v Chilwan (supra) the court held that to determine the reasonableness or otherwise of a restraint of trade provision, the following questions should be asked: -

1. Is there an interest of the one party, which is deserving of protection at the termination of the agreement?

2. Is such interest being prejudiced by the other party?

3. If so, does such interest so weigh up qualitatively and quantitatively against the interest of the latter party that the latter should not be economically inactive and unproductive?

4. Is there another facet of public policy having nothing to do with the relationship between the parties but which requires that the restraint should either be maintained or rejected?

[27] Whether the scope of Hattingh’s restraint undertakings extends to the activities in which he is currently engaged under the auspices of CMS, and whether CMS is a competitor of the applicant are matters in respect of which the applicant bears the onus of proof.

[28] To the extent that Hattingh challenges the reasonableness of the restraint, it is for him to show that the applicant has no protectable proprietary interest. It is well-established that a restraint holder’s proprietary interests fall into two categories. The first is confidential information which is useful for the carrying on of the business and which could be used by a competitor, if it were to be disclosed to that competitor, to gain a relative competitive advantage (sometimes referred to as ‘trade secrets’). The second is relationships with customers, potential customers, suppliers and others that go to make up what is sometimes referred to as the ‘trade connection’ of the business, this being an important aspect of its incorporeal property known as goodwill.

[29] Whether information constitutes a trade secret is a question of fact (see Mossgas (Pty) Ltd v Sasol Technology (Pty) Ltd [1999] 3 All SA 321 (W) at 333), Walter McNaughten (Pty) Ltd v Schwartz & others 2004 (3) SA (C)). For information to be confidential, it must be capable of application in trade or industry, i.e. it must be useful and not public knowledge and property; secondly, it must be known to a restricted number of people or a closed circle; and thirdly, it must be of economic value to the person seeking to protect it (see Townsend Productions (Pty) Ltd v Leech & others 2001 (4) SA 33 (C) Walter McNaughten (Pty) Ltd v Schwartz & others (supra)).

[30] The need by an employer to protect trade connections arises where an employee has access to customers or suppliers and is in a position to build up a particular relationship with them so that when the employee leaves the service of the employer, he or she could easily induce the employer’s customers and suppliers to follow him or her to a new business. Again, this is a question of fact, and more often than not one of degree.

[31] It is incumbent on the employee under restraint to establish that he or she had no access to confidential information and never acquired any significant personal knowledge of confidential information or influence over the applicant’s customers while in the applicant’s employ (see Rawlins supra at 542F-543A). In other words, it is enough for the party seeking to enforce a restraint to show that trade connections through customer or supplier contact exist, and that they can be exploited if the employee was to be employed by a competitor or compete with the business of the applicant. It is not for the applicant to have to run the risk of the employee communicating its trade secrets or utilising its customer connections to the advantage of a competitor. It is also not incumbent on an applicant to enquire into the bona fides of the employee or to demonstrate that he or she is mala fides before it is entitled to enforce a contractually agreed restraint. The holder of the restraint also does not have to show that the employee in fact utilised information confidential to it – it is enough that the employee could do so. As Marais J stated in BHT Water treatment (Pty) Ltd v Leslie and another 1993 (1) SA 47 (W) at 57J-58D:

In my view, all that the applicant can do is to show that there is secret information to which the respondent had access, and which in theory Hattingh could transmit to CMS should he desire to do so. The very purpose of the restraint agreement was that the applicant did not wish to have to rely on the bona fides or lack of retained knowledge on the part of the first respondent, of the secret formulae. In my view, it cannot be unreasonable for the applicant in the circumstances to enforce the bargain it has exacted to protect itself. Indeed, the very ratio underlying the bargain was that the applicant should not have to content itself with crossing its fingers and hoping that the first respondent would act honourably or abide by the undertakings that he has given.

Analysis

[32] I turn first to the meaning of ‘The Business’ in clause 2.2 of the restraint agreement. As recorded above, the definition includes “the supply, installation and/or maintenance of an electronic fuel management system.”. In order to interpret the agreement, the court must necessarily have regard to the meaning of the words, in the context provided by reading the particular provision in the light of the document as a whole, and the circumstances attendant upon it coming into existence. (see Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA)).

[33] What is clear from clause 2.2, read with clause 3 of the restraint agreement, in which the substantive restraint is recorded, is that Hattingh agreed, amongst other things, that he would not compete or be concerned with or associated with, engaged, employed or interested in a business which supplies, installs and/or maintains an electronic fuel management system. In the answering affidavit, Hattingh does not dispute that the product developed by CMS, with his assistance, is a product that ‘has the ability to assist in the fuel industry’. The refrain adopted in the answering affidavit to the effect that CMS’s solution relates to “fluids” as opposed to “fuel” is frankly semantic – on Hattingh’s own version, CMS’s solution is a “complete fluids management solution” which can be employed in the fuel industry. The fact that the CMS solution is intended for a broader

market, extending as it does to fluids other than fuels, does not mean that the CMS fluids management system does not compete with the applicant’s clean fuel solution, as an element of the fuel management system that it sells to its clients.

[34] In short, the business of CMS, with the assistance of Hattingh, now includes a product which is an electronic fluid management solution, which itself includes an electronic fuel management solution. This falls squarely within the definition of ‘The Business’ in clause 2.2 of the restraint, comprising as it does the ‘supply, installation and/or maintenance of an electronic fuel management system’.

[35] It does not assist Hattingh to state, as he does, that at the time he signed the restraint in November 2014, the applicant’s fuel management business had not developed so as to include its IIOT fuel management solution, the development of which commenced only in 2019. As a matter of logic, subsequent developments in the applicant’s fuel management system must be included in the definition of “The Business” or the very purpose of the restraint, i.e., the protection of the goodwill of the applicant’s business, would be defeated. It would make no sense for the restraint to protect only the business activities that existed at the time of signature of the restraint, to the exclusion of subsequent developments in the

applicant’s business, especially when as in the present instance, Hattingh played an integral role in the development of the product that forms the subject of the present application.

[36] The terms of Hattingh’s restraint undertaking are thus sufficiently broad to encompass the clean fuel solutions activity in which he was directly engaged in the two years prior to the termination of his employment with the applicant.

[37] The next question is whether for the purposes of clause 3.1.1 of the restraint agreement, CMS’s business is a business ‘similar to or competing with’ the business of the applicant. Hattingh contends that the applicant did not ‘properly’ pursue the clean fuel solution and that it thus does not have a clean fuel solution against which the CMS solution competes. Hattingh avers that the applicant did not ‘properly’ pursue the clean fuel solution for two reasons. First, he avers that the applicant could only pursue its clean fuel solution if it concluded a distribution agreement with Donaldson, which it failed to do; secondly, he states that members of the applicant’s management did not wish to pursue the development of a clean fuel solution and preferred to stick to the applicant’s core business. In the replying affidavit, the applicant disputes that its clean fuel solution was dependent on the conclusion of a distribution agreement with Donaldson. Its version is that Donaldson supplies a single hardware component, the other associated manufacturer being RCC, which together supply components that are then integrated on the applicant’s own proprietary platform. The applicant’s version is thus that the conclusion of a distribution agreement with Donaldson was thus never a prerequisite for the development of the applicant’s own proprietary solution, and that the applicant continues to purchase products from Donaldson, in the absence of the conclusion of a distribution agreement. The members of the applicant’s management named by Hattingh as being opposed to the development of a clean fuel solution all deny not wishing to pursue that solution in favour of a retention of focus on what had until recently been the applicant’s core business.

[38] In my view, there is no material dispute of fact on the papers to such a degree so as to preclude the court from concluding that by virtue of his engagement with CMS, Hattingh is not ‘engaged, employed or interested ..any business similar to or competing with the Business..’. Hattingh does not deny the content of The Fluid Lab’s website, which describes its business as ‘total fluid contamination management’ and goes on to say that its system enables:

‘… real-time enterprise decision-making for maximizing the quality of your industrial fluids. At the Fluids Lab we build intelligent IOT systems that detect contaminants in your fluids, transmits data to a secure controller which processes it and applies your business rules. From their (sic) we provide you with remote access to the key metrics to take rapid action for the benefit of your business.’

[39] And further:

‘A solution was born here to provide them [hyper-bulk fuels customers in the mining industry] with a visual dashboard of particles present in their fields. Our totalisor (sic) of particles in their fuels from when lost the filters were serviced provided them with a replacement cycle perfectly in line with the filter manufacturer’s guidelines. This naturally allowed them to be compliant with the injector quality requirements of the fleet and in the process, a number of KPIs were fulfilled.’

[40] On the website, there is a focus on the use of the solution in heavy mining machinery, with specific emphasis on the management and planning of a filter replacement strategy. There can be no question that the system described on The Fluids Lab website is the same or similar to the clean fuel solution developed by the applicant, with the direct involvement of Hattingh in his capacity as business development manager.

[41] In his answering affidavit, Hattingh avers that the ‘website has subsequently been switched off and will in due course be integrated into a single web platform under the banner of the second respondent and does not correctly reflect any of the true abilities of the product developed by the Second Respondent.’ Hattingh does not disclose what the ‘true abilities’ of the product developed by him under the auspices of CMS might be nor, the unconvincing distinction between ‘fluids’ and ‘fuels’ aside, precisely how they differ from that developed by the applicant.

[42] To the extent that Hattingh contends that the intellectual property in the contamination management system provided by the applicant belongs to Donaldson, and that the applicant could only pursue its clean fuel solution if it concluded a distribution agreement with Donaldson, this contention overlooks the primary inquiry, which is whether by his engagement with CMS, Hattingh is engaged in a business similar to or competing with that of the applicant. On Hattingh’s own version, the business of CMS, now supplemented by the integration of The Fuel Lab brand, is in direct competition with the applicant. It is no answer to say, as Hattingh seeks to do, that the intellectual property in elements of the applicant feel management solution’s

belongs to a third party. The present dispute is not one that concerns the enforcement of intellectual property rights; rather, it concerns the enforcement of agreed restraint undertakings and their scope. Insofar as Hattingh suggests that the applicant abandoned its clean fuel solution, the evidence suggests that after Hattingh’s resignation, the development of the clean fuel solution has continued. The applicant’s evidence is that its clean fuel solution is currently installed at two pilot projects, the

Mogalakwena and Khwezela mines, and that the applicant will shortly commence development of its advanced filtration platform.

[43] Counsel submitted that the high watermark in the applicant’s case is that it had a product in the development stage and that nothing had been said about any product that the applicant had actually made available to the market. This submission rather misses the point – it is not in dispute that the applicant invested time, money and resources in the development of a clean fuel solution. The fact that the product remains in a developmental phase (at least to the extent that pilot projects remain underway), does not deprive the applicant of the protection of the restraints given in its favour. The fact remains that CMS, which prior to Hattingh’s association with it was not a competitor of the applicant, is now competitor, to the extent that CMS, with Hattingh’s involvement, now engages in the same or a similar business.

[44] In so far as the reasonableness of the restraint undertakings is concerned, Hattingh avers that the restraint is overly broad insofar as its temporal and geographical elements are concerned, but proffers no evidence to support this averment. In regard to the functional element of the restraint, the applicant has set out Hattingh’s duties as a business development manager in great detail. These allegations are met with the blanket denial in a contention that Hattingh no longer has access to this information after returning his laptop to the applicant and that, in any event, the information would not be of any use to CMS. The dispute of fact for which Hattingh contends is more apparent than real. The applicant does not have to assume the risk that Hattingh may have retained information that would be of assistance to CMS, states it is entitled to the full protection of the restraint for which it has contracted. Similarly, in regard to confidential information to which Hattingh was privy, the detailed allegations of the applicant are dealt with in a cursory manner, with Hattingh repeating his allegation that the applicant did not execute on its strategy to develop a clean fuel solution because it did not conclude a distribution agreement with Donaldson. This is simply not correct when regard is had to the evidence set out by the applicant in reply. Similarly, Hattingh’s contention that the intellectual property in any information to which he may have been privy belongs to Donaldson and/or RCC is not sustainable having regard to the fact that components supplied by those entities are merely components in the clean fuel solution developed by the applicant. Hattingh spent the last two years of his employment with the applicant in the development of the applicant’s clean fuel solution. It does not lie his mouth to suggest that this development period was unnecessary or of no use because the information is in the public domain.

[45] In summary: the definition of ‘The Business’ in the restraint agreement extends to the activity currently undertaken by Hattingh, under the auspices of CMS, being an activity that includes the supply, installation and/or maintenance of an electronic fuel management system. Hattingh’s reliance on the word ‘fuels’ as opposed to ‘fuels’ is a matter of semantics, not substance. As a matter of fact, CMS conducts a business similar to or competing with the business of the applicant. By virtue of his association with CMS, Hattingh is in breach of his restraint undertakings. Hattingh has made no serious case to challenge the functional, geographic and temporal components of his restraint undertakings. The applicant is thus entitled to the order that it seeks.

Costs

[46] The Labour Appeal Court has held that when this court exercises jurisdiction under section 77(3) of the Basic Conditions of Employment Act, as it does in this instance, the rule established by section 162 of the LRA to the effect that costs do not follow the result and must be determined by reference to the requirements of the law and fairness, does not apply (see Baise v Mianzo Asset Management (2019) 42 ILJ 1987 (LAC)). The rule to be applied in proceedings such as the present is that costs follow the result, save in exceptional circumstances. There is no reason to deprive the applicant of its costs, including the costs of senior counsel.

I make the following order:

1. The first respondent is interdicted and restrained until 31 January 2024, and in the Republic of South Africa from, directly or indirectly:

1.1. being employed, engaged or interested in any manner whatsoever in the business of the second respondent and the third respondent;

1.2. competing against or being concerned or associated with, engaged, employed or interested in any manner whatsoever in a business which competes against the business of the applicant;

1.3. soliciting or seeking to obtain for himself or any other person, entity, firm, corporation or institution, including the second respondent and the third respondent, enquiries or order for any services or product which falls within the ambit of the applicant’s business;

1.4. soliciting, canvassing, accepting or be interested in any benefit from any person whether in money or otherwise, for any product or service which is supplied, sold, furnished or otherwise made available by the applicant to any person or concern who either at 31 January 2022 or at any time during the 2 years immediately preceding 31 January 2022 was a customer or supplier of the applicant;

1.5. encouraging, persuading or inducing any employee of the applicant to terminate his/her employment with the applicant or employing such employee.

2. The first respondent is interdicted and restrained from directly or indirectly:

2.1. using any of the confidential property, intellectual property or trade secrets of the applicant;

2.2. divulging or disclosing to any third party, including the second respondent and the third respondent, any of the confidential information, intellectual property or trade secrets of the applicant.

3. The first respondent is to pay the costs of the application, including the costs of two counsel where so engaged.

André van Niekerk

Judge of the Labour Court of South Africa

Appearances:

For the Applicant:

C Whitcutt SC, with him P Bosman.

Instructed by:

ENS Africa Inc.

For the first respondent:

G Dobie

Instructed by:

Lloyd Kieser Inc.