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THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

 

Not Reportable

Case No: J 737/22

 

In the matter between:

 

SLO-JO INNOVATION (PTY) LTD                                             Applicant

 

And

 

CHRISTINE BEEDLE                                                                 First Respondent

 

FLAVOURPRO (PTY) LTD                                                         Second Respondent

 

Heard:                20 October 2022

Delivered:           9 November 2022

 

This judgment was handed down electronically by circulation to the parties' representatives by email. The date for hand-down is deemed to be 9 November 2022.

 

JUDGMENT

 

PRINSLOO J

 

Introduction

 

[1]      The Applicant launched an urgent application to enforce the confidentiality and restraint of trade clauses, as contained in the First Respondent’s (Ms Beedle) contract of employment. The application is opposed.

[2]       The matter was initially enrolled for hearing on 29 July 2020 when Mr Bishop for Ms Beedle, raised points in limine. The points in limine were argued and judgment was handed down on 10 August 2022, dismissing the points in limine. The Applicant subsequently approached the Registrar to re-enrol the matter and the matter was enrolled for 16 September 2022 but was moved to 21 September 2022, due to the unavailability of the Respondents’ counsel. The matter was enrolled for hearing on 21 September 2022 but was removed from the roll and eventually enrolled for hearing on 20 October 2022.

Urgency

[3]        Mr Bishop submitted that the matter was not urgent and should not be entertained by the urgent court.

[4]        In deciding whether a matter is to be adjudicated on an urgent basis, the Court exercises a discretion.

[5]       I have considered the averments made in the Applicant’s papers in respect of urgency and the Respondents’ opposition thereto and I do not intend to repeat them in any detail.

[6]       The present application was filed on 22 June 2022, within two months after the Applicant became aware of Ms Beedle’s breach of the restraint of trade agreement. Prior to launching the urgent application and during May 2022, the Applicant’s attorneys addressed letters of demand to Ms Beedle, seeking an undertaking that she would comply with her restraint undertakings. This was done in an attempt to avoid litigation. When Ms Beedle refused to give the undertakings, this application was filed.

[7]       The matter was set down for hearing on 29 July 2022, on which occasion the Respondents raised points in limine and the merits of the application were not decided, it was set down again for 16 September 2022 but was moved to a different date due to the unavailability of the Respondents’ counsel. The matter was subsequently removed from the roll by the Registrar and re-enrolled for hearing on 20 October 2022.

[8]       It is trite that as a general rule, applications to enforce restraint undertakings have an inherent quality of urgency. In Boomerang Trade CC t/a Border Sheet Metals v Groenewald and another,[1] the Court restated the principle that proceedings for the enforcement of a 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.

[9]       Furthermore, 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 ordinary opposed motion roll is full until the end of 2023. The restraint that the applicant seeks to enforce is until 1 November 2023 and would have expired before this application would be enrolled for hearing in the normal course. If this application is to be enrolled and adjudicated in the normal course, the restraint agreement and obligations will become meaningless and the relief sought academic. Evidently, the Applicant will not get relief in the ordinary course.

[10]       I have considered the issue of urgency and in exercising my discretion, this matter is to be decided on an urgent basis.

The applicable legal principles

[11]       The general principles applicable to restraint agreements are well-established. In Massmart Holdings v Vieira and another[2] the Court summarised them as follows:

‘[4]     …Restraint agreements are enforceable unless they are unreasonable (see Magna Alloys and Research (SA) (Pty) Ltd v Ellis [1984] ZASCA 116; 1984 (4) SA 874 (A)). In general terms, a restraint will be unreasonable if it does not protect some proprietary interest of the party seeking to enforce a restraint. In other words, a restraint cannot operate only to eliminate competition. The party seeking to enforce a restraint need only invoke the restraint agreement and prove a breach of the agreement, nothing more. The party seeking to avoid the restraint bears the onus to establish, on a balance of probabilities, that the restraint agreement is unenforceable because it is unreasonable (see 2013 (1) SA 135; Magna Alloys and Research (SA) (Pty) Ltd supra; Den Braven SA (Pty) Ltd v Pillay and another 2008 (6) SA 229 (D)).

[5]      One of the most influential statements of the law in regard to the determination of the reasonableness or otherwise of a restraint of trade agreement is that in Basson v Chilwan and others 1993 SA 742 (A)…’

[12]       In Esquire System Technology (Pty) Ltd t/a Esquire Technologies v Cronjé and another,[3] the position regarding restraints of trade in our law, having considered the position before and after the constitutional dispensation, has been summarised as follows:

‘1.      Covenants in restraint of trade are valid. Like all other contractual stipulations, however, they are unenforceable when, and to the extent that, their enforcement would be contrary to public policy. It is against public policy to enforce a covenant which is unreasonable, one which unreasonably restricts the covenantor's freedom to trade or to work.

2.       Insofar as it has that effect, the covenant will not therefore be enforced. Whether it is indeed unreasonable must be determined with reference to the circumstances of the case.

3.       Such circumstances are not limited to those that existed when the parties entered into the covenant. Account must also be taken of what has happened since then and, in particular, of the situation prevailing at the time the enforcement is sought.

4.       Where the onus lies in a particular case is a consequence of the substantive law on the issue.

5.       What that calls for is a value judgment, rather than a determination of what facts have been proved, and the incidence of the onus accordingly plays no role.

6.       A court must make a value judgment with two principal policy considerations in mind in determining the reasonableness of a restraint:

6.1.      The first is that the public interest required that parties should comply with their contractual obligations, a notion expressed by the maxim pacta servanda sunt.

6.2.      The second is that all persons should in the interests of society be productive and be permitted to engage in trade and commerce or the professions.’

[13]       In view of the dicta referred to supra, the point of departure is that restraint of trade agreements are valid. The restraint of trade clause will be enforceable if there is an interest that requires protection and insofar as it is reasonable.

[14]       The starting point in an application such as this one is that a party seeking to enforce a restraint of trade is required to invoke the restraint agreement and prove a breach thereof. If the restraint is reasonable, it will be enforceable.

[15]       The party seeking to avoid the restraint bears the onus to show, on a balance of probabilities, that the restraint agreement is unenforceable because it is unreasonable.[4]

[16]       It is common cause that Slo-Jo is a full-service designer drinks company, specializing in the development of designer beverages and concepts which range from inter alia gourmet milkshakes to flavourful cocktails. The Applicant is a wholly owned subsidiary of Slo-Jo and was established for the overall and ultimate benefit of Slo-Jo. Slo-Jo’s products include Slo-Jo developed and produced powders, liquids, syrups and sauces, which are used to create beverages to be sold by its clients to the consumer. The beverages are either frozen, crushed, blended, hand-built, shaken, frothed or sauced. The Applicant operates in the field of designer beverages and concepts.

[17]       The Applicant’s case is that Ms Beedle acted in breach of the restraint agreement by taking up employment with the Second Respondent (Flavourpro), a competitor of the Applicant.

[18]       Whether the scope of Ms Beedle’s restraint undertakings extends to the activities in which she is currently engaged under the auspices of Flavourpro, and whether Flavourpro is a competitor of the Applicant are matters in respect of which the Applicant bears the onus of proof.

[19]       In casu, it is common cause that Flavourpro competes with the Applicant and that there is a direct overlap with the product offerings of the Applicant. It is undisputed that Flavourpro markets the same or similar products in the form of beverages to that of the Applicant and Slo-Jo and that it is a direct competitor of the Applicant.

The Applicant’s onus

[20]       The Applicant, as the party seeking to enforce a restraint, has to invoke the restraint agreement and prove a breach of the agreement.

[21]       In April 2007, Ms Beedle concluded a written contract of employment, which contains the restraint of trade clause. Ms Beedle resigned from her employment on 1 November 2021 and the Applicant seeks to enforce the terms of her contract of employment in this application.

[22]       Ms Beedle disputed the aforesaid contract and submitted that there is no restraint of trade agreement between her and the Applicant and therefore the Applicant has no right, contractual or otherwise, to seek the relief it seeks against her. The restraint of trade is unenforceable, absent a contractual obligation to that effect.

[23]       The question of whether a restraint of trade agreement exists between Ms Beedle and the Applicant, which gives the Applicant a clear and contractual right to the relief it seeks, was decided by this Court and fully dealt with in the judgment that was handed down on 10 August 2022 and there is no need to repeat the submissions and findings set out in said judgment.

[24]       This Court found that Ms Beedle’s contract of employment, including the restraint of trade, transferred to the Applicant and the obligation Ms Beedle had agreed to in the confidentiality and restraint of trade undertaking, transferred to the Applicant.

[25]       The party seeking to enforce a restraint need only invoke the restraint agreement and prove a breach of the agreement, nothing more. In New Justfun Group (Pty) Limited v Turner and others[5] (New Justfun), the Court enforced the restraint of trade and held with reference to customer connections that – “it is sufficient for the applicant to show that the customer contact exists and that they can be exploited by the former employee”[6] and, with reference to confidential information that “the respondent must establish that he or she had no access to that information or that he or she had never acquired any significant personal knowledge of, for instance, the applicant’s customers while in the applicant’s employ. All that an applicant need show is that there is secret information to which the respondent had access and which in theory the respondent could transmit to the new employer should he or she desire to do so…[7] It remains ultimately for [the respondent] to establish that she had no access to confidential information and that she never acquired any significant personal knowledge of, or influence over, the applicant’s customers...”[8]

[26]       The Applicant also has to show that there was a breach of the agreement.

[27]       The contract of employment provides inter alia that Ms Beedle may not be interested in any business which carries on business, manufactures, sells or supplies any commodity or goods, brokers or acts as an agent in the sale or supply of any commodity or goods and/or performs or renders any service, in competition with or identical or similar or comparative to that carried on, sold, supplied, brokered or performed by the Applicant.

[28]       The Applicant made clear averments to the effect that Ms Beedle had a direct involvement with Flavourpro, a direct competitor of the Applicant and provided detailed statements regarding Ms Beedle’s conduct in breach of the provisions of the restraint agreement.

[29]       Ms Beedle admitted that Flavourpro is a direct competitor of the Applicant and that she occupies a position of consultant at Flavourpro.

[30]       The Applicant has discharged its onus in seeking to enforce the confidentiality and restraint undertakings, agreed to by Ms Beedle, by invoking the restraint agreement and by proving the breach thereof.

[31]       Relevant for purposes of this application are clauses 11 and 12 of Ms Beedle’s contract of employment.

The Agreement

[32]       Clause 11 of Ms Beedle’s contract of employment provides for ‘confidentiality’ and provides that:

‘11         CONFIDENTIALITY

11.1  The employee is required to keep confidential and not to disclose any of the company’s trade secrets, confidential documentation, technical know-how and data, drawings, systems, chemical formulae, methods, software, processes, client lists, programmes, marketing and/or financial information to any person other than to persons employed and/or authorized by the company or associated company (where applicable) who are required to know such secrets or information for the purpose of their employment and/or association with the company, both during the continuance of his/her employment hereunder or thereafter.

11.2  The company and the employee hereby acknowledge that the confidential and/or information represents a substantial monetary value to the company.

11.3  The employee shall adhere to the above obligation not to disclose any confidential information to any undertaking, firm, company or person with which the company may at any time be in technical and/or competition, co-operation or association.

11.4  The employee acknowledges that the aforesaid obligation shall remain in force indefinitely and notwithstanding termination of his/her contract for any reason whatsoever.’

[33]       The restraint of trade as recorded in clause 12 of Ms Beedle’s contract of employment reads as follows:

‘12         RESTRAINT OF TRADE

12.1. In this particular clause, the following words will have the following meaning:

12.0.1      “Business” shall mean any person, business, company, association, corporation, partnership, undertaking, whether incorporated or not;

12.1.2      “interest/Interested” shall mean interested or concerned, directly or indirectly, whether as proprietor, partner, shareholder, employee, agent, financier, shareholder or in any other capacity whatsoever, and/or permitting his/her name to used [sic] in connection with or in any manner relating thereto;

12.1.3      “The territory” shall mean provinces of South Africa.

12.2. The employee records that he/she agrees to this restraint of trade in consideration of:

12.2.1      All benefits which has or will accrue to him/her from the company;

12.2.2      his/her knowledge of and/or access to the business methods, business secrets, technological information and data and/or manufacturing methods of the company, which are to be known to and which will be gained by him/her;

12.2.3      the goodwill factor and technological, manufacturing and sales expertise in a business and/or undertaking such as the business and/or undertaking of the company;

12.2.4      The confidential nature of the information, documentation and other data relating the customers and suppliers of the company, which are available to the employee.

12.3  In terms of this restraint of trade, the employee specifically undertakes and agrees to:

12.0.1      not to be interested in any business in the territory which carries on business, manufactures, sells or supplies any commodity or goods, brokers or acts as agent in the sale or supply of any commodity or goods and/or performs or renders any service, in competition with or identical or similar or comparative to that carried on, sold, supplied, brokered or performed by the company during the period of the employment of the employee up to and including the last day of the employment of the employee;

12.0.2      not to solicit the custom of or deal with or in any way transact with, in competition to the company, any business, company, firm, undertaking, association or person which during the period of 2 (two) years preceding the date of termination of the employment of the employee has been a customer or supplier of the company in the territory; and

12.3.3      not to directly or indirectly offer employment to or in any way cause to be employed any person who was employed by the company as at the termination of the employment of the employee with the company or at any time within a period of 2 (two) year(s) immediately preceding such termination.

12.1  Each and every restraint in this entire clause shall operate and be valid and binding for a period of 2 (two) year(s), calculated from the date of termination of the employment of the employee with the company.

12.2  Each restraint in this entire clause shall be construed as being severable and divisible and applicable to the employee, whether that restraint is in respect of:

12.5.1         Nature of business or concern;

12.5.2         Area or territory;

12.5.3         Articles, commodities or goods sold and/or supplied;

12.5.4         services performed or rendered;

12.5.5         company or concern entitled to the benefit thereof.

12.6   Each restraint in this entire clause shall be deemed in respect of each part thereof to be separately enforceable in the widest sense possible from the other parts thereof, and the invalidity or unenforceability of any other part of such restraint, or in fact any other terms of this agreement.

12.7   All restraints in this clause are for the benefit of the company.

12.8  The employees specifically acknowledges and agrees:

12.8.1      That he/she has carefully read and considered all the terms and provisions of this clause 12 relating to the restraints applicable to him/her;

12.8.2      that this clause and/or all the restraint contained therein, after taking all circumstances into account, are fair and reasonable; and

12.8.3      that should he/she at any time dispute the reasonableness or fairness of any of the provisions of this clause and/or restraints, then and in such event he/she will have the onus to provide or prove such unreasonableness or fairness.’

Ms Beedle’s onus

[34]       Ms Beedle, as the party seeking to avoid the restraint, bears the onus to show that on a balance of probabilities, the restraint agreement is unenforceable because it is unreasonable.

[35]       The Labour Court generally applies the principle that parties are allowed to file only three sets of affidavits and that they are not entitled to file further affidavits without the leave of the Court. Where a further affidavit is sought to be filed, the party seeking to introduce the affidavit must provide a proper explanation and satisfy the Court that the affidavit ought to be admitted. In practice, however, in disputes concerning the application of restraint and confidentiality undertakings, the Court will allow a ‘fourth set’ (and even a fifth set of affidavits), given that there is a shift in the onus if the reasonableness of the restraint is challenged. The application of the onus of proof in those disputes often results in the reasonableness of the restraint being raised only in the answering and replying affidavits. The respondent is entitled to file a fourth affidavit to dispute or rebut the applicant’s averments as to the reasonableness of the restraint if that is indeed attacked in the answering affidavit and responded to in the replying affidavit.

[36]       When a dispute of fact arises on the affidavits before a motion court, a final order can only be granted if the facts averred by the applicant in its affidavits which have been admitted by the respondent, together with the facts alleged by the respondent, justify such an order.

[37]       In casu, Ms Beedle did not file a fourth set disputing the Applicant’s averments as to the reasonableness of the restraint, notwithstanding the fact that the onus is on her to show that the Applicant has no protectable proprietary interest and that the restraint is unreasonable.

[38]       The application will be decided, considering the onus of the parties and applying the principles set out in Plascon Evans[9] accordingly.

[39]       To the extent that Ms Beedle challenges the reasonableness of the restraint, it is for her 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 and the second is relationships with customers, potential customers, suppliers and others. These aspects will be considered infra.

Issues to be decided

[40]       The main issue that must be decided is whether the restraint of trade agreement and confidentiality undertakings are enforceable.

[41]       I already alluded to the fact that a restraint of trade will be enforceable if there is an interest that requires protection and if it is reasonable and vice versa.

[42]       Ms Beedle challenges the restraint agreement on the ground that the Applicant has no legitimate protectable interests that require the extensive protection it seeks and that it is unreasonable with regard to duration and geographical area.

[43]       I will deal with these aspects in turn.

Protectable interest: general principles

[44]       In Continuous Oxygen Suppliers (Pty) Ltd t/a Vital Aire v Meintjes and another,[10] the Court in considering the question of whether there was indeed a protectable interest held that:

‘As I pointed out in Esquire Technologies, a restraint is valid if there is a proprietary interest which justifies protection. Those interests are usually in the nature of trade secrets, know-how, pricing or customer connections. Therefore, a restraint would be an enforceable restriction on the activities of an employee who (for example) had access to the company's customers and could use his/her relations with the company's customers to the advantage of a competitor and to the detriment of the company.’ [Footnote omitted]

[45]       In New Justfun,[11] it was held that:

‘Proprietary interests that are legitimately capable of protection by a restraint agreement extend both to confidential matters which are useful for the carrying on of the business and which could be used by a competitor, if disclosed, to gain a relative competitive advantage, and to relationships with customers, potential customers, suppliers and others that go to make up what is referred to as the ‘trade connection’ of the business. The second kind of proprietary interest capable of protection is that which comprises confidential matter useful for the carrying on of the business, and which could be used by a competitor, if disclosed, to gain a relative comparative advantage. These are referred to as ‘trade secrets’ (see Sibex Engineering Services (Pty) Ltd v Van Wyk  1991 (2) SA 482 (T)).’

[46]       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[12].

[47]       It warrants emphasis that in an application such as the present, all the Applicant needs to show is that there is confidential information to which Ms Beedle had access and which she could transmit, if so inclined. It is not necessary to show that Ms Beedle has in fact used information confidential to the Applicant. Similarly, in relation to customer connections, it is not necessary to do 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.[13]

[48]       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. 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 fide 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.[14]

[49]       In Basson v Chilwan[15] (Basson), 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?

Analysis

Protectable interest

[50]       The first issue to be decided is whether the Applicant has a proprietary interest, deserving of protection, which will be threatened by Ms Beedle’s employment with Flavourpro.

[51]       Insofar as the first leg of the test in Basson is concerned, it is well established that the proprietary interests that can be protected by a restraint agreement are essentially of two kinds, namely –

i.           all confidential matter which is useful for the carrying on of the business and which could therefore be used by a competitor, if disclosed to him, to gain a relative competitive advantage. Such confidential material is sometimes compendiously referred to as “trade secrets”; and

ii.         the relationships with customers, potential customers, suppliers and others that go to make up what is compendiously referred to as the “trade connection” of the business, being an important aspect of its incorporeal property known as goodwill.[16]

[52]       Whether information constitutes a trade secret is a factual question[17]. For information to be confidential, it must be –

i.           capable of application in trade or industry, that is, it must be useful and not be public knowledge and property;

ii.         known only to a restricted number of people or a closed circle; and

iii.        of economic value to the person seeking to protect it.[18]

[53]       The Applicant submitted that it has a protectable interest in the form of confidential information and trade secrets, wherefore it has a clear right to enforce the restraint and confidentiality undertakings provided by Ms Beedle.

[54]       Ms Beedle’s case on the other hand is that the Applicant does not have any proprietary interests worthy of protection. She submitted that success in the industry they conduct business in is founded on providing efficient service to customers such as Nandos by understanding their product needs and communicating same effectively to the relevant suppliers for the purposes of producing the required product. The Applicant agrees that the understanding of customer needs is vitally important as it goes to being able to translate the customer’s need into a product of value to the customer.

[55]       All that the Applicant has to do is to show that there is secret information to which Ms Beedle had access and which in theory, she could transmit to Flavourpro, should she 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 Ms Beedle. It cannot be unreasonable for the Applicant in the circumstances to enforce the bargain it has exacted to protect itself[19]. Indeed, the very ratio underlying the bargain was that the Applicant should not have to content itself with crossing its fingers and hoping that Ms Beedle would act honourably or abide by the undertakings that she has given.

[56]       The onus is on Ms Beedle to prove the unreasonableness of the restraint.[20] She must establish that she had no access to confidential information and that she never acquired any significant personal knowledge of the Applicant’s customers or suppliers whilst in the Applicant’s employ.[21] It suffices if it is shown that trade connections through the customer contact exist and that they can be exploited if the former employee was employed by a competitor or competes with the business of his or her former employer.[22]

[57]       The Applicant’s version is that Ms Beedle was employed as a sales representative in 2007 and between the period 2007 and 2010 she was mainly responsible for inter alia dealing with and managing the sale of the Applicant’s products to independent clients and procuring and interacting with new customers.

[58]       It is undisputed that around 2010, Ms Beedle focused more on the research and product development aspect of the Applicant’s business and that she became less involved in sales. The Applicant’s version is that, in her new role, Ms Beedle worked with Slo-Jo’s suppliers and manufacturers to develop new products and concepts, to ensure that the taste of the products was maintained, ensuring quality control of the products and menu development which consisted of compiling different elements of a recipe in order to create a particular beverage.

[59]       Ms Beedle’s response in short is that the Applicant is overstating her role and is trying to make much more of it than what was actually the case. She admitted that the Applicant uses suppliers to produce base substances such as flavour syrups or powders, which would constitute the basis for the product itself, but stated that the intellectual property in and to the base substance or product belongs to and is owned by the supplier. She denied that she was instrumental to any intellectual property process of the final product or that any intellectual property was shared with her.

[60]       Ms Beedle’s version is that she would typically receive a brief from the Slo-Jo sales department, whereafter she would communicate it to the chosen supplier. The supplier would send samples back to her and she would provide feedback to the customer with a view of satisfying that customer to the point that the product can be produced. She conveyed the customer’s requirements and preferences to the supplier and she assisted in the tasting of the product but she was not actively involved in the development with the suppliers, as they do their own development on the basis of briefs and instructions received from beverage companies. Compact Industries, a supplier, allowed her to sit in the laboratory from time to time to speed up the process regarding the flavour and end result of the product. Ms Beedle claims that Compact Industries and Agrana are two suppliers that Flavourpro would never use.

[61]       Ms Beedle stated that she fielded queries or complaints from customers if they were of the view that the drinks sold to them were not on standard. Once the supplier completed the final product, she would taste it and confirm that all was in order. When a complaint was received, she would communicate it to the quality controller, who had to investigate the complaint and give her feedback. She tried to deal with the queries and complaints to the satisfaction of the customer. Ms Beedle’s version is that when new projects arose, she, together with a collective team, would work on the product and sign it off. She would taste new batches of products with the quality controller and assistant.

[62]       Ms Beedle emphasised that she was not a product quality control expert and that the quality controller and food technologist were responsible for ensuring that all specifications and food safety requirements were met and only if they were satisfied that the requirements were met, she would sign off on the specification. She could not sign off on specifications on her own.

[63]       Ms Beedle admitted that Slo-Jo’s business grew from 2010 onwards, that she was instructed to meet with and guide suppliers abroad and to try and replicate the product offering of powders and fruit purees.

[64]       The Applicant’s case is that it runs a profound risk that Flavourpro could request Ms Beedle to do the identical task and the fact that Ms Beedle has the knowledge of each and every product, both produced and pitched to customers, places the Applicant in a position where it runs the risk that the said information could be given away and placed into the hands of its competitors. The Applicant alleged that Ms Beedle has attempted to copy products and with her knowledge of how to create the product and her relationship with the suppliers, she is in a prime position to re-create the Applicant’s product. Ms Beedle did not file an affidavit to deny the risk alleged by the Applicant.

[65]       It is undisputed that Slo-Jo’s business model changed from selling generic products to the market at large to focusing on the actual production of its own products, through the use of various manufacturers and producing bespoke and exclusive products for major clients such as franchises and large corporate companies. Ms Beedle travelled to America on behalf of Slo-Jo, where she met with suppliers, visited their laboratory and discussed new products to increase the scope and number of sales. The Applicant’s undisputed version is that Ms Beedle travelled often to America where she would visit laboratories to develop many products, she would guide the development team to get the correct product taste and she has intimate knowledge of the Applicant’s most popular product, the coffee freezo.

[66]       Ms Beedle’s version is that there is nothing novel or secret about the recipe of the final product. It is not intellectual property and the list of constituent parts and their percentages or quantities are reflected under the heading recipes and are also included on the packaging of the specific product. She submitted that the recipes are amended by the customers themselves as it is public knowledge and there is nothing confidential about it.

[67]       This is disputed and the Applicant’s version is that ingredient labels do not constitute a recipe and that a reference to a generic ingredient does not highlight that the ingredient may be a specialised and exclusive variant of that ingredient. A supplier will source its various flavours from a ‘flavour house’ and different suppliers use different flavour houses, which have differences in the quality and intensity of a specific flavour. Ms Beedle knows this and she knows which supplier is better suited to meet the requirements of a particular customer.

[68]       Ms Beedle stated that new ideas were discussed by the appropriate people, including a mixologist, barista or chef and she was but one of several individuals dealing with ideas and innovation and that on many occasions, the brief came intact and in complete form from the customer. She in fact only tasted the products, which the Applicant submitted is patently implausible due to the position she had held with the Applicant.

[69]       It is not Ms Beedle’s pleaded case that she is not in possession of information that could be of value to a competitor of the Applicant. Rather, a theme throughout Ms Beedle’s opposing affidavit is that she did no more than to follow instructions. This is a version difficult to accept in view of the fact that she was the head of the Applicant’s ‘Research and Development Team’ (R&D team), with a team (including inter alia a food technologist, menu developer and head mixologist) reporting to her. At the time of her resignation, twelve employees reported to Ms Beedle. Her version that notwithstanding the fact that the R&D team members reported to her, they were actively involved in the technicalities of the respective roles and that she “left them to fulfil their designated functions as they were employed and paid to do so” is improbable. The Applicant disputed that Ms Beedle played a minor or insignificant role as the head of the R&D team. Various specialists reported to her and whilst they may have knowledge of the technicalities of their respective roles, she was the ultimate custodian of the information as she headed up this department.

[70]       The Applicant’s undisputed version is that the R&D department has always been the belly of the organisation and that in the absence of a strong R&D team, there is no product to sell. Ms Beedle was the face of the R&D department for many years.

[71]       The Applicant submitted that the R&D team was responsible for the development of Slo-Jo’s Product Book, which is a book published annually, containing Slo-Jo’s generic range of products available for purchase. Ms Beedle was ultimately responsible for the compilation and completion of the said book. The inside cover of the Product Book for the years 2019, 2020 and 2021 contained a photograph of Ms Beedle as well as her signature. The Product Book is circulated within the beverage market at large. Ms Beedle did not dispute that her photograph or signature was included in the brochure and her version is that it was included to put a face or a human touch to the brochure, it was a marketing strategy, that her name did not appear and that she had no authority to ‘sign off’ on the brochure.

[72]       Ms Beedle submitted that the Product Book is no more than a catalogue or brochure and it is a simple marketing device which all beverage companies produce and circulate in the beverage market at large. It contains Slo-Jo’s generic range of products, the identity, price and ingredients, which are in any event freely available to anyone who enquires about the product, it is available on the product packaging, Slo-Jo’s website and the brochure. The brochure was compiled by the marketing team. The R&D team made suggestions to the marketing team on a list of recipes that were needed and the marketing team compiled the Product Book. She was not ultimately responsible for the writing or compilation of the Product Book.

[73]       Ms Beedle’s case is that there is no need for her or Flavourpro to copy any of the Applicant’s or Slo-Jo’s products or to rely on the products used by them in order to work with suppliers such as Fruition. She stated that the ingredients and recipes of any product will be published on the packaging of the product and that information or recipe is not confidential or protectable.

[74]       This is disputed by the Applicant, who submitted that the products referenced by Ms Beedle were developed by Ms Beedle for the Applicant and that the recipes to create the specific products and the base recipes to create minor tweaks to the specific products are the confidential information of the Applicant. It is not the suppliers’ responsibility to supply different products to different customers. A supplier, such as Fruition, would be able to supply a similar product to Ms Beedle, who would use her knowledge of the industry to change it back to the Applicant’s original recipe, of which she has knowledge.

[75]       The Applicant further disputed that the flavours are generic and explained that the flavours are based on taste profiles, produced by the supplier for a specific customer and Ms Beedle has played a significant role in developing those. At a supplier day, Flavourpro presented many identical products to Slo-Jo, which illustrates that Ms Beedle intends to assist Flavourpro to copy and use the Applicant’s confidential information. A taste profile or recipe is not the same as a generic ingredient list and it is not information that is available to the public.

[76]       The Applicant’s case is that a beverage may be a universal beverage, but the composition varies widely and the Applicant has trade secrets in respect of the composition of certain beverages, which are at risk with the Respondents. Ms Beedle for example knows which customers had signed off on a specific flavour variant with which suppliers and she knows the pricing point of those specific signed-off flavours.

[77]       Ms Beedle stated that neither she nor Flavourpro has any intention to rely on confidential information or product knowledge of the Applicant or Slo-Jo. They do not need to do so and have not done so.

[78]       The authorities applicable to a case like this is clear: All that the Applicant needs to show is that there is confidential information to which Ms Beedle had access and which, in theory, she could transmit to Flavourpro or any other new employer should she desire to do so. The Applicant does not have to show that Ms Beedle has in fact utilised the information confidential to it - it is sufficient to show that she could do so. The very purpose of the restraint agreement the Applicant seeks to enforce is that the Applicant does have to rely on the bona fide's of Ms Beedle in respect of the confidential information it seeks to protect.

[79]       In my view, the Applicant has made out a case for the protection of confidential information. The information Ms Beedle had access to, which is fully dealt with supra, in her capacity as an employee of the Applicant, meets the requirements of confidential information in that it is capable of application in the industry, it is useful for the carrying on of the business and is not public knowledge and property. For instance, unlike what Ms Beedle submitted, ingredient labels do not constitute recipes or specific taste profiles and a reference to a generic ingredient does not highlight that the ingredient may be a specialised and exclusive variant of that ingredient. That type of information is not within the public domain or common knowledge. Furthermore, it may be so that generic flavours (such as strawberry or orange) are used, but the flavours used by the Applicant are not generic in the sense that they are rather based on taste profiles, produced by the supplier for a specific customer. Ms Beedle has played a significant role in developing those and it is information which could be used by a competitor, if disclosed, to gain a relative competitive advantage.

[80]       In short, Ms Beedle had access to the Applicant’s information that is capable of application in trade or industry, that is useful, known only to a restricted number of people or a closed circle, is of economic value to the Applicant, and can be useful to a competitor to the detriment of the Applicant.

[81]       I already alluded to the first leg of the test in Basson, to wit that the proprietary interests that can be protected by a restraint agreement are essentially of two kinds – confidential material and relationships. What remains to be considered is the issue of relationships with customers, potential customers, suppliers and others that go to make up what is compendiously referred to as the “trade connection” of the business, being an important aspect of its incorporeal property known as goodwill.[23]

[82]       It is the Applicant’s case that in the development of products and concepts with and for the suppliers and manufacturers, Ms Beedle developed close relationships with those suppliers and manufacturers. Ms Beedle did not deny the existence of a relationship with suppliers or manufacturers. Her version, however, is that the suppliers and manufacturers want the buyers to purchase as much of their products as possible and as such, the relationships referred to by the Applicant, were developed by the suppliers intentionally as they sell to different beverage companies, competing with each other in the industry. She averred that the supplier relationship is owned and controlled by the supplier and not by her or Slo-Jo. The Applicant disputed that the supplier relationship is owned and controlled by the supplier. The Applicant submitted that it would brief a supplier on a product design it wishes to create, as suppliers do not approach the Applicant to generate work and suppliers have no dealings with customers whatsoever.

[83]       In my view, logic dictates that suppliers would be interested in ongoing business relationships but it does not mean that such a relationship is owned and controlled by the supplier.

[84]       The Applicant further submitted that in her capacity as the head of the R&D team, Ms Beedle worked closely with Ms Civin, who was a sales executive of Slo-Jo and is the founder and sole director of Flavourpro. As a pair, they developed very close working relationships with certain of Slo-Jo and the Applicant’s biggest clients, including inter alia McDonald’s, Mugg & Bean, Wimpy, Nandos, KFC, Ocean Basket and smaller independent clients. In her capacity, Ms Beedle was responsible for overseeing the interactions and product development for certain of Slo-Jo’s clients, as handled by members within the team.

[85]       Ms Beedle stated that Ms Civin was employed by Slo-Jo for 16 years and when she left and founded Flavourpro in competition with the Applicant, Slo-Jo took no steps in terms of any restraint of trade agreement or otherwise against her, but left her in the beverage industry for well over a year, when her restraint of trade agreement only expired in May 2022. The Applicant cannot now feasibly contend that Ms Civin and Flavourpro suddenly constitute a competitive threat to the Applicant.

[86]       In reply, the Applicant explained that it did not enforce the restraint against Ms Civin due to a number of factors, inter alia that Ms Civin was a key member of the sales team and had no interaction with suppliers and had insignificant and minimal interaction with product development, which is different from the position in respect of Ms Beedle. Due to inter alia a change in her job description and the COVID-19 pandemic, Ms Civin’s exposure to clients had been largely diluted by the time of her resignation and as she had no exposure to product development and supplier relationships which would place the Applicant at risk, the restraint was not enforced. Furthermore, the Applicant was not fully aware of Flavourpro as a competitor, until Ms Beedle joined Flavourpro in April 2022 and by the time the Applicant fully appreciated the importance of Flavourpro as a competitor, her restraint period had almost entirely run its course (by end of May 2022).

[87]       Ms Beedle stated that the real purpose of enforcing the restraint is to break up the relationship between her and Ms Civin as ‘a pair’, which the Applicant now sees as a competitive threat. This is disputed by the Applicant, who submitted that it has no objection to competition from Flavourpro, but it seeks protection where Flavoupro competes unlawfully with the use of confidential information and trade secrets to take advantage of the customer and supplier relationships, which the Respondents have no right to use.

[88]       Ms Beedle’s case is that groups such as McDonald’s, Mugg & Bean, Nandos, KFC and Ocean Basket all deal with a variety of beverage companies at the same time and none of them has exclusive suppliers. Ms Beedle submitted that she is not in a position, by virtue of her role at the Applicant, to influence any of the said groups to move their custom away from Slo-Jo or the Applicant to Flavourpro. In respect of the ‘smaller independent clients’, her case is that she has no idea which customers the Applicant refers to and she cannot meaningfully respond to the vague allegation.

[89]       Ms Beedle explained that customers such as McDonald’s, Mugg & Bean and Ocean Basket are very large restaurant franchise chains, which do not have exclusive relationships with beverage companies. They do not prefer one beverage company above the other and they are open to products from all beverage companies and as such, they deal with several different beverage companies on an ongoing basis. As a result, it is impossible to develop a close working relationship with them, as alleged by the Applicant. Ms Beedle disputed that a customer connection exists between any beverage company and these large customers and stated that neither Slo-Jo nor the Applicant has sufficient influence to sway customers to place business with them solely on the basis of a customer relationship.

[90]       She conceded that her function as the head of the R&D team was to make sure that all of its members carried out their various functions and delivered what was expected on time and that she knew what customers instructed them to do in respect of a product. Ms Beedle however stated that the actual task or work involved in getting the suppliers to produce what was instructed was done by the technical people within the R&D team.

[91]       Fruition is one of Slo-Jo’s key and primary manufacturers, which produces on average 60% of Slo-Jo’s bespoke and exclusive products for its major clients. It is undisputed that Ms Beedle worked closely with Fruition until her resignation. Ms Beedle’s response is that she was merely a go-between between Fruition and Slo-Jo. This version is improbable, given the position held by Ms Beedle and the functions she performed.

[92]       It is not disputed that Ms Beedle approached Fruition, on behalf of Flavourpro, to have more than 30 sample products, similar to those of the Applicant and Slo-Jo, produced under the label of Fruition. In fact, she specifically admitted that the samples she was looking for from Fruition would have been similar to the product sold by the Applicant and Slo-Jo. She stated that the products have generic flavours such as orange, cherry or mint and neither the Applicant nor Slo-Jo have a monopoly over these flavours, tastes and products. The flavours are universal and generic and she used what the Flavourpro customers told her regarding their preferences to request the supplier to meet the customer’s needs and produce sample products accordingly. They are not copying any of the Applicant or Slo-Jo’s products.

[93]       Ms Beedle’s case is that she and Flavourpro are entitled to approach potential suppliers like Fruition in the marketplace if they so wish.

[94]       In my view, this is a clear misunderstanding on the part of Ms Beedle. Although Flavourpro might be entitled to approach potential suppliers, she is not entitled to do so, as she had agreed to a restraint which specifically prohibits it.

[95]       It is undisputed that Flavourpro and Fruition had been in communication with each other, but that Fruition is not prepared to deal with Flavourpro as it has an exclusive supply arrangement with Slo-Jo. Ms Beedle’s defence is that the Applicant does not need any restraint of trade to protect the relationship with Fruition as there is no relationship between her and Fruition.

[96]       In my view, Ms Beedle misses the point of the restraint agreement. The fact that Fruition refuses to work with Flavourpro is not sufficient to protect the Applicant from deliberate attempts by Ms Beedle to approach other suppliers in breach of her restraint. The Applicant cannot be expected to rely on suppliers to ensure that Ms Beedle abides by her contractual obligations owed to the Applicant. Ms Beedle made clear efforts to act in breach of her restraint and to compete with the Applicant and nowhere in her answering affidavit did she deny this nor did she provide an undertaking not to do so. In fact, Ms Beedle made it clear that she will not stop to compete with the Applicant, which obviously includes the possibility that she would approach other suppliers of the Applicant in order to compete, in breach of her restraint.

[97]       In fact, on Ms Beedle’s own version it “is the Applicant in compelling Fruition to stop working for Flavourpro that spurred me onto approaching other suppliers…” This is in no uncertain terms nothing but a clear indication that Ms Beedle has every intention to approach other suppliers in clear breach of the undertakings she has given.

[98]       The Applicant should not have to content itself with crossing its fingers and hoping that Ms Beedle would act honourably or abide by the undertakings that she has given. It does not lie in the mouth of the ex-employee who has breached a restraint agreement by taking up employment with a direct competitor to say to the ex-employer “[t]rust me: I will not breach the restraint further than I have already been proved to have done”.[24]

[99]       Ms Beedle failed to show that she had no access to confidential information or that she had not forged any customer connections with suppliers, as fully dealt with supra. It is not unreasonable to assume or to fear that should Ms Beedle take up employment with one of the Applicant’s competitors, she would be in a position to take advantage of these connections or use the information for the benefit of the competitor and to the Applicant’s detriment.

[100]    Considering all the facts, I am satisfied that the Applicant has an interest that deserves protection and that such an interest is being prejudiced by the conduct of Ms Beedle.

[101]    Ms Beedle’s defence that the Applicant does not have a protectable interest, has to fail.

[102]    In seeking to avoid the enforcement of the restraint, Ms Beedle bears the onus to show that the restraint against her should not be enforced because to do so would, on an application of the test in Basson, be unreasonable and contrary to public policy.

Reasonableness

A quantitative and qualitative weigh off the respective interests of the parties

[103]    The third consideration in Basson is the weighing of interests.

[104]    The question is how does the Applicant’s interest weigh up qualitatively and quantitatively against Ms Beedle’s interests to be economically active and productive. This consideration goes hand in hand with a consideration of the public interest that requires parties to comply with their contractual obligations and that allows all persons to be productive and be permitted to engage in trade and commerce or professions.

[105]     In Reddy v Siemens Telecommunications (Pty) Ltd,[25] the Supreme Court of Appeal upheld a 12-month restraint against an employee who had joined a competitor (Ericsson). The Court restated the following principles:

‘A Court must make a value judgment with two principal policy considerations in mind in determining the reasonableness of a restraint. The first is that the public interest requires that parties should comply with their contractual obligations, a notion expressed by the maxim pacta servanda sunt. The second is that all persons should in the interests of society be productive and be permitted to engage in trade and commerce or the professions. Both considerations reflect not only common-law but also constitutional values. Contractual autonomy is part of freedom in forming the constitutional value of dignity, and it is by entering into contracts that an individual takes part in economic life.’

[106]    In applying the two aforesaid principal considerations, the particular interest must be examined. A restraint would be unenforceable if it prevents a party after termination of his or her employment from partaking in trade or commerce without a corresponding interest of the other party deserving of protection. I already found that the Applicant does have an interest that deserves protection.

[107]    In her answering affidavit, Ms Beedle submitted that the Applicant is not entitled to the relief it seeks as it has no protectable interest warranting the scope and duration of the restraint provisions. Ms Beedle took issue with the fact that the Applicant has not put forward a “single justification warranting the scope and time period of the restraint…” I already dealt with the onus of the parties in an application to enforce a restraint. It is not necessary for the Applicant to justify the scope and duration of a restraint, it only needs to show that there is indeed a restraint of trade agreement in existence and that the employee is in breach thereof. It is for Ms Beedle, who seeks to avoid the restraint, to show that it is unreasonable. The onus shifted to Ms Beedle and as such, if she wanted to dispute what the Applicant stated in reply, she had to file a further affidavit to rebut or dispute the Applicant’s averments. Ms Beedle did not do so and it is evident from her averments in her answering affidavit, that she had lost sight of the fact that she bore the onus to show that the restraint was unenforceable because it is unreasonable.

[108]    Be that as it may, Ms Beedle attacked the reasonableness of the restraint on the grounds relating to scope and duration.

Scope

[109]    In respect of scope, Ms Beedle’s case is that the Applicant seeks to prevent her from working in the industry, which has housed her career for 15 years. The Applicant further seeks to restrain her from working throughout South Africa, when it does not have a proprietary interest in such a vast area.

[110]    The Applicant submitted that the self-same customers would have a presence in all major cities in South Africa and the suppliers operate nationally. The customers and suppliers have a national presence and circumventing the national restriction, would offer no protection to the Applicant at all. Ms Beedle did not dispute this.

[111]    Ms Beedle stated that she needs to pursue her career in the beverage industry, where she has skills and experience and if she is not permitted to do so, she will be severely prejudiced. Her case is that the Applicant still has an entire R&D team, which will carry on doing what they did when she left the Applicant’s employ.

[112]    The Applicant admitted that it has an R&D division that continues to operate after Ms Beedle had left, but stated that that does not per se protect the Applicant in respect of the information and customer and suppliers connections which Ms Beedle has and which she can utilise in competition with the Applicant.

[113]    Ms Beedle stated that she values her position as a consultant for Flavourpro and that she needs the work. She tried to fill a position at her husband’s business, but it did not work out and their joint family income dropped. She has to support her son of 26 and grandson of 2,5 years old. As a family, they had to downgrade.

[114]    The Applicant took note of Ms Beedle’s personal concerns but stated that Ms Beedle was not dismissed, that the Applicant was sorry that she had left and in fact attempted to persuade her back to employment. Her personal circumstances are her own making.

[115]    The Applicant made it clear that it has no objection to Ms Beedle continuing with her specialised skills and knowledge, even customer knowledge and supplier relationships, provided that it is not in the beverage industry and is limited to the food industry. The Applicant explained that it did not immediately enforce the restraint of trade against Ms Beedle as she indicated that she would be involved in the muffin mix side of Flavourpro’s business. Ms Beedle did not deny that she had told the Applicant that she would be involved in the muffin mix side of Flavourpro’s business, but her version is that she also informed the Applicant that she would consult on all aspects of Flavourpro’s business.

[116]    It is not disputed that Ms Beedle had left the Applicant’s employ of her own accord and that she is a skilled individual. There is nothing before this Court to show that Ms Beedle will not be able to or is not capable of seeking alternative employment within the food industry. The food industry is far bigger than the beverage industry and in its replying affidavit, the Applicant reiterated that it has no intention of preventing Ms Beedle from working in the industry, provided that it is not in the field of beverages, until her restraint has expired. The Applicant emphasized that Ms Beedle’s consultation with Flavourpro is not per se problematic, the issue is that she consults in respect of the beverage industry specifically, with the associated approach to the Applicant’s suppliers.

Duration

[117]    This Court has to decide whether the restraint period of two years is, based on the facts, too long and therefore unreasonable. This calls for a consideration of the reasons proffered by Ms Beedle in support of her case that the restraint is unreasonable in duration.

[118]    In respect of period, Ms Beedle’s case is that she had left the Applicant’s employ with effect from 1 November 2021, but only became active in the industry at the end of April 2022. The Applicant thus had a period of six months to neutralise any threat that she might have posed. The Applicant seeks to prevent her from working in the industry until 1 November 2023, a period Ms Beedle submitted that the Applicant is not entitled to. Ms Beedle did not provide any further reasons as to why the duration is unreasonable.

[119]    In its replying affidavit, which Ms Beedle, unfortunately did not respond to, the Applicant explained that the duration of the restraint is not unreasonable because Ms Beedle was privy to pipelines of the design, pricing, creation and or sale of the Applicant’s and Slo-Jo’s products, spanning in excess of 30 months. The Applicant listed examples of the applicable time periods to illustrate why the duration of the restraint is necessary and reasonable. For instance, if a customer were to approach the Applicant with a specific request or brief for a beverage, that brief would go via Ms Beedle to the supplier. Initial price negotiations would take place at this point and the ordinary lead time may be up to 24 months for larger clients, particularly if it were a themed brief. Between 24 to 18 months prior to the launch, the product would be developed between the R&D team and the supplier, who would be responsible for the manufacturing, once approved. Between 18 and 12 months prior to the launch of the product to the customer, the R&D team and the supplier would tweak the product for final launch. The refining process would occasionally involve the customer, but the ultimate refining process was left to the R&D team.

[120]    The Applicant explained that Ms Beedle has a deep knowledge of the customer requirements from the moment that a customer approaches the Applicant with a specification, the development of the recipe of the product, including the rejected, second and third choice products, the pricing of the product that is canvassed at the outset and the exclusivity of the product.

[121]    The Applicant’s case is that there is a high turnover of products in the industry, which goes to the rationale for the existence of the restraint in the first place. There is a 24-36 months lead time or pipeline for product launches, and it is important for backup products to be ready. Ms Beedle has knowledge of these and the restraint is necessary.

[122]    There is nothing before this Court to gainsay what the Applicant presented in respect of the reasons why the period of the restraint is necessary and reasonable.

[123]    Ms Beedle has provided no reasons in law why the restraint is not enforceable and the reasons she provided are nothing but considerations ad misercordiam, which have no place in an application to enforce a contractually agreed to term and which, if it was the only reason not to enforce a restraint of trade, would defeat the purpose of a restraint and undermine the consequence and effect of a valid and binding agreement.

[124]    The last aspect that has to be considered is whether there is an aspect of public policy, having nothing to do with the relationship between the parties, which requires the restraint being enforced or not. In my view, there is no aspect of public policy that militates against the enforcement of the restraint. This is not a matter where the restraint is unreasonable and therefore unenforceable.

[125]    Ms Beedle is now employed by a direct competitor of the Applicant and she is manifestly in a position where she could exploit and utilise the confidential information and trade connections she had obtained whilst in the Applicant’s employ to the advantage of Flavourpro and to the Applicant’s detriment. In fact, Ms Beedle’s conduct displayed a brazen breach of terms she contractually agreed to but subsequently elected to disregard and violate, as if she never agreed to them.

[126]    In summary, I accept that the Applicant has a protectable interest and that Ms Beedle remains free to be economically active, with due consideration of the terms of the restraint agreement. There is nothing before this Court to show that Ms Beedle is not capable of obtaining alternative employment within the food industry or that if she is not employed in the beverage industry, she will be desolate and be without any prospect of employment.

[127]    Ms Beedle adduced no evidence whatsoever to show that enforcement of the restraint is disproportionate, having regard to any of her countervailing interests.

[128]    The restraint is reasonable and therefore enforceable.

Costs

[129]    The Labour Appeal Court has held[26] that when this court exercises its jurisdiction under section 77(3) of the Basic Conditions of Employment Act[27], as it does in this instance, the rule established by section 162 of the Labour Relations Act[28] 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. The rule to be applied in proceedings such as the present is that costs follow the result, save in exceptional circumstances.

[130]    In casu, there are no exceptional circumstances and there is no reason to deprive the Applicant of its costs, including the costs of counsel. However, I am mindful of the fact that Ms Beedle is an individual but I cannot ignore the fact that she acted in breach of her restraint agreement when she took up employment with Flavourpro and that she was persistent in her refusal to abide by the terms of the agreement, which ultimately led to this urgent application.

[131]    In the present circumstances, the interests of justice require that Ms Beedle pays at least a portion of the Applicant's costs. In my view, a sum equivalent to 50% of the Applicant’s costs will best serve those interests.

[132]    In the premises, I make the following order:

Order

1.         The First Respondent is interdicted and restrained from disclosing any of the Applicant’s trade secrets, confidential documentation, technical know-how and data, drawings, systems, chemical formulae, methods, software, processes, client lists, programmes, marketing and/or financial information which she acquired by virtue of her employment with the Applicant;

2.         The First Respondent is interdicted and restrained until 1 November 2023 and within South Africa from:

2.1.        being interested, in any way, in any business which carries on business, manufactures, sells or supplies any commodity or goods, brokers or acts as an agent in the sale or supply of any commodity or goods and performs or renders any service in competition with or identical or similar or comparative to that carried on, sold, supplied brokered or performed by the Applicant, during the period of her employment with the Applicant;

2.2.        soliciting, in any way, the custom of or deal with or transact with, in competition to the Applicant, any business, company, firm, undertaking, association or person which, during the period of 2 years preceding the date of termination of the employment of the First Respondent, has been a customer or supplier of the Applicant in South Africa;

2.3.        directly or indirectly offering employment to or in any way causing to be employed any person who was employed by the Applicant as at the termination of her employment with the Applicant or at any time within a period of 2 years immediately preceding such termination.

3.         The First Respondent is to pay the costs of the application, limited to 50% of the Applicant’s taxed costs, to include the cost of counsel.

 

Connie Prinsloo

Judge of the Labour Court of South Africa

 

Appearances:

 

For the Applicant:                            Advocate S Saunders

 

Instructed by:                                   Eversheds Sutherland (SA) Inc Attorneys

 

For the Respondents:                      Advocate A Bishop

 

Instructed by:                                   Gitttins Attorneys

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