Digicore Fleet Management (Pty) Ltd v Maryanne Steyn and Smartsurv Wireless (Pty) Ltd

Maryanne Steyn was employed by Digicore Fleet Management (Pty) Ltd as a sales executive from May to December 2006, selling vehicle tracking devices. Steyn had prior experience in the industry and brought with her valuable contacts with insurance brokers in the Durban area. She signed an employment contract containing a restraint of trade clause preventing her from working for a competitor for 24 months within 200km of Durban North after termination of her employment. In January 2007, Steyn left Digicore to work for Smartsurv Wireless (Pty) Ltd, a competitor, after being offered a more lucrative position. Digicore learned that Steyn had approached two of their clients and commenced proceedings to enforce the restraint of trade clause. Steyn maintained that she had not undergone any significant training, was given no confidential client information except for about 20 clients, and was primarily using her own insurance broker contacts that she had brought to Digicore. Her employment with Digicore lasted only seven months.

• Whether Digicore had a proprietary interest worthy of protection through enforcement of the restraint of trade clause
• Whether Steyn's employment with a competitor threatened Digicore's proprietary interests
• Whether the restraint of trade undertaking was reasonable and enforceable
• Whether interim interdictory relief was appropriate in the circumstances

The appeal was dismissed with costs.

A restraint of trade clause in an employment contract is unenforceable where the employee poses no real threat to the employer's proprietary interests. Where an employee was employed for a short period, brought their own industry contacts and experience to the employment, received minimal training or confidential information, and after leaving employment merely continues to utilize their own pre-existing contacts rather than exploiting the former employer's confidential information or client base, the employer has no protectable proprietary interest that warrants enforcement of the restraint. The employee's right to be economically active and productive outweighs the employer's claimed interest in such circumstances. The party seeking to enforce a restraint of trade must demonstrate both a proprietary interest warranting protection and a genuine threat to that interest by the restrained party.

The court noted that the case was marked as having "no precedential significance" at the outset of the judgment. Lewis JA observed that Digicore's admitted main business was fleet management systems, and Steyn had no experience in that area either before or after joining Digicore, nor did she attempt to break into that area of the business. The court also made reference to the case of Reddy v Siemens Telecommunications (Pty) Ltd as a contrasting example where a restraint was enforced because the employee had undergone extensive training and acquired confidential information - distinguishing that case from the present facts. The court noted in passing that Smartsurv (the second respondent) played no role in the appeal proceedings.

This case is significant in South African restraint of trade jurisprudence as it demonstrates the application of the reasonableness test and the Basson v Chilwan fourfold test to employment restraints. It establishes that employers cannot enforce restraint of trade clauses where: (1) the employee brings their own contacts and experience to the employment relationship; (2) the employment period is very short; (3) the employee receives minimal training or confidential information; and (4) the employee is not threatening the employer's actual proprietary interests but merely utilizing skills and contacts they possessed before employment. The case reinforces that restraints of trade must protect genuine proprietary interests and cannot be used merely to prevent competition or restrict an employee's fundamental right to economic activity. It is particularly important for defining the limits of enforceable restraints in short-term employment relationships and where employees bring existing industry contacts to their employment.