Employment and workplace instruments · 04
Restraint of trade
Protects a legitimate business interest after someone leaves — no more widely than that interest requires.
Protects a legitimate business interest after someone leaves — no more widely than that interest requires.
The protectable interest identified specifically — customer connections, confidential information, trade secrets, not “the business”; a defined area, period and scope of prohibited activity, each no wider than that interest requires; separate non-solicitation of clients and of staff; and severability drafted so that an unreasonable limb can fall away without taking the clause with it.
In South African law a restraint is presumed valid and the burden of showing it unreasonable rests on the employee — the opposite of what most people assume. That makes over-drafting tempting and self-defeating: a court that finds the restraint unreasonable may strike it rather than rewrite it. Two years with a real geographic limit, tied to a named protectable interest, is worth more than five years and “the Republic”.
The law it sits under
What governs this instrument.
A restraint of trade is enforceable in South African law unless it is unreasonable, and the party resisting it bears the onus of showing that it is — the position settled in Magna Alloys and Research (SA) (Pty) Ltd v Ellis 1984 (4) SA 874 (A). Reasonableness is measured against a protectable interest, and against the restraint’s duration, area and scope. A restraint drafted without a protectable interest to point at is simply a restraint on competition, and will not be enforced.
Related pages, tools and documents
Where this instrument sits in the wider set, and the engagement that produces it.
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