Backsports (Pty) Ltd v Motlhanke and Another

The applicant, Backsports (Pty) Ltd, operates in the Internet Communications and Technologies industry, rendering broadcasting, advertising, social media and production services. The first respondent, Ofentse Retshidisitswe Motlhanke, was employed by the applicant as a Senior Stream Lead from 1 January 2024 and was summarily dismissed on 16 October 2024, nine and a half months into his employment, following a disciplinary process involving seven allegations of misconduct. The first respondent was also the sole director of the second respondent, O Media Visuals (Pty) Ltd, since 9 April 2019. The employment contract contained a restraint of trade clause (clause 16) restraining the first respondent for 12 months post-termination from competing with the applicant, soliciting its employees, and engaging in similar activities within South Africa and other territories where the applicant operated. The applicant alleged that shortly after dismissal, the first respondent breached the restraint agreement by: (1) attempting to recruit the applicant's employee Sihle Ndou; (2) approaching Sean Everett (who contracted with SuperSport Schools and owned Oban Productions, clients of the applicant) for work; (3) delivering streaming services at the Central Gauteng Athletics Awards under the name Optic Media; and (4) allegedly threatening to sabotage the applicant's assets and "take Erwin down". The applicant sought to enforce the restraint agreement and interdict the first respondent from various activities including soliciting customers and employees, uttering threats, harassment, and damaging the applicant's assets.

• Whether the applicant established the existence of protectable proprietary interests (confidential information and/or trade connections) to justify enforcement of the restraint of trade agreement
• Whether the applicant proved that the first respondent breached the terms of the restraint agreement
• Whether it is reasonable to enforce a restraint of trade agreement against an employee who was dismissed by the employer
• Whether the Court has jurisdiction to interdict the first respondent from uttering threats, harassment and damaging assets in the absence of an employment relationship
• Whether the restraint of trade agreement was reasonable in the circumstances

The application was dismissed with costs.

An employer seeking to enforce a restraint of trade agreement must establish protectable proprietary interests in the form of confidential information or trade connections to which the employee had access and which could be transmitted to a new employer to the applicant's prejudice. Bare allegations without sufficient particularity regarding the employee's duties, access to confidential information, and trade connections made are insufficient to justify enforcement. Where an employee is dismissed (as opposed to voluntarily resigning), the employer may be deemed to have waived its right to enforce the restraint agreement, and enforcement would be unreasonable as it would unjustifiably limit the individual's constitutional right to earn a livelihood and choose their trade, occupation and profession. The duration of employment is relevant to reasonableness - a 12-month restraint is unreasonable where employment lasted less than 10 months and the employer failed to establish protectable interests.

The Court observed that the application appeared not to be made bona fide and was intended to make the first respondent suffer and ruin his livelihood and career rather than to protect genuine proprietary interests. The Court noted that the application focused on alleged criminal acts (threats, sabotage) which had nothing to do with enforcement of restraint agreements. The Court commented that it would be an injustice and unjustified limitation of an individual's rights to enforce a restraint agreement against someone when the ex-employer dismissed them, stating that "the applicant, having fired the first respondent, now expects him to starve by interdicting and restraining him from earning a living and from his occupation and trade." The Court also noted that the applicant did not plead the source of jurisdiction or power for the Court to grant orders interdicting threats, harassment and damage to assets in the absence of an employment relationship.

This case is significant in South African labour law as it reinforces the principle that restraint of trade agreements must be founded on genuine protectable proprietary interests and cannot be used merely to prevent competition or punish former employees. It establishes that an employer who dismisses an employee may waive its right to enforce a restraint of trade agreement, as it would be unreasonable and unjust to both dismiss an employee and then prevent them from earning a livelihood in their field. The judgment emphasizes that courts will scrutinize applications for enforcement of restraints carefully, requiring detailed evidence of confidential information accessed, trade connections made, and the nature of the employee's duties and interactions with clients. The case demonstrates that bare allegations without substantiation will not suffice. It also clarifies that the Labour Court lacks jurisdiction to grant interdicts unrelated to the employment relationship (such as threats and harassment) once that relationship has terminated. The judgment protects employees' constitutional rights to choose their trade, occupation and profession, particularly where they have been dismissed rather than resigning voluntarily.