Restraint of trade agreements require courts to weigh an employer’s right to protect its proprietary information (i.e. confidential information or customer connections), which it has secured through a contract, on one hand; and an employee’s constitutional right to freedom of trade, on the other.
Once a breach of the restraint agreement is proven, the main question a court is required to determine is whether the enforcement of the restraint of trade agreement is reasonable in the circumstances. Reasonableness, being an indeterminate and elastic concept, results in differing conclusions being reached on whether a restraint agreement should be enforced.
In a recent case of Rham Equipment (Pty) Ltd v Botes and Another (2026-093159) (LC), the Labour Court was required to determine whether a restraint of trade agreement should be enforced for a period of 24 months. In this case, the employer wisely did not seek to enforce the agreement for the full 36-month term as contractually agreed.
After proving that the restraint agreement existed and that Botes had breached the agreement, the onus fell on Botes to prove that the enforcement of the restraint agreement would be unreasonable. However, this onus crept up on Botes with some lead pipe.
Botes worked for the applicant as a technical illustrator. To perform his functions, he was given unrestricted access to the applicant’s confidential information, including that relating to the underground mining products sold by the applicant. Botes was also provided with access to the applicant’s pricing information. Despite an attempt to argue that this information was not confidential in nature, the Court disagreed.
After this finding was reached by the Court, Botes’ hope to prove that the restraint agreement was unreasonable disappeared like a phantom. More so, because of what the Court termed a ‘lukewarm denial’ by Botes, the Court accepted that Botes would not be rendered economically inactive should the restraint agreement be enforced.
The Court then reached what appears to be a startling finding in our recent jurisprudence: that the onus plays a part in restraint cases. Several recent judgments of the Labour and High Courts have misinterpreted the importance of the judgment of the Supreme Court of Appeal in Reddy v Siemens Telecommunications 2007 2 SA 486 (SCA) to mean that the onus does not apply to restraint proceedings. However, these findings applied only to a unique case like Reddy’s. In short, the onus is still relevant, as with almost every other dispute where rights are enforced. The law on this issue, in Magna Alloys and Research (SA) (Pty) Ltd v Ellis 1984 (4) SA 874 (A) has remained unchanged for 52 years!
In closing, the Court upheld the application and enforced the restraint of trade agreement for a period of 24 months. However, this may be more of a case which was lost by Botes, than was won by the applicant.
Restraint of trade applications are complicated. It is not something which one could ‘dabble in’, and expert advice should be sought when drafting restraint of trade agreements, seeking to enforce those agreements or when, like Houdini, an employee seeks to escape one.
