Sobralia Beleggings (Pty) Ltd t/a ACDC Express Port Elizabeth and Another v Stanton Marlon Human and Another

The first applicant employed the first respondent as a Key Account Associate from September 2023, which became permanent from 1 July 2024 with a salary of R28,880 per month. His employment contract contained confidentiality (clause 24) and restraint of trade provisions (clause 26) preventing him from working for competitors within 100km for 12 months post-employment and from soliciting customers. The first respondent resigned on 6 August 2024 with his last day being 30 August 2024. He informed the branch manager, Mr Heritage (who was also a director and shareholder), that he intended to work for a customer. By the first week of September 2024, Mr Heritage knew the first respondent had joined the second respondent, a direct competitor located 5.5km away, but did not escalate this to management. The applicants only officially became aware on 15 October 2024 and launched urgent proceedings on 28 October 2024, giving the respondent only 3 days to respond. The applicants sought to enforce the restraint provisions.

• Whether the matter was sufficiently urgent to justify departure from the ordinary rules of court and the truncated time periods afforded to the respondent
• Whether the applicants had established a protectable interest in the form of customer/trade connections that the first respondent could exploit
• Whether the applicants had established a protectable interest in confidential information that could be used by the first respondent
• Whether enforcement of the restraint of trade agreement would be reasonable and not contrary to public interest
• Whether the onus had been discharged by the respective parties regarding the enforceability of the restraint

The application was dismissed with costs on scale B in favour of the first respondent.

The binding legal principles established are: (1) In restraint of trade cases, the employer bears the initial onus to establish that customer/trade connections exist that are capable of exploitation, specifically that the connection is such that it will probably enable the former employee to induce customers to follow him to a new business - only then does the onus shift to the employee to prove enforcement would be unreasonable. (2) A protectable interest in customer connections does not arise merely because a former employee had contact with customers during employment; the connection must be of a nature that enables inducement of customers to follow the employee. (3) Confidential information and trade connections are interlinked as protectable interests - confidential customer information cannot ground enforcement of a restraint unless the former employee has the trade connections necessary to exploit that information. (4) In urgent applications to enforce restraints, applicants cannot rely on self-created urgency arising from unexplained delays in asserting their rights, and the degree of departure from ordinary court rules and time periods must be justified by the actual circumstances of urgency.

The court made several notable observations: (1) While restraint of trade matters may be inherently urgent due to the time-limited nature of restraint periods, this does not automatically justify extreme truncation of time periods for respondents - there are degrees of urgency. (2) The fact that a branch manager who was also a director and shareholder did not consider it necessary to escalate the breach or restrain the former employee is relevant to assessing both urgency and the merits of whether protectable interests actually exist. (3) The court noted that in the electrical supply industry where customers are primarily price-driven and shop around suppliers, building the type of personal customer relationships necessary to induce customers to follow an employee may be difficult to establish. (4) A modest salary structure without commission undermines claims that an employee held significant influence over customers. (5) Corporate governance explanations for internal delays (such as claiming someone's portfolio did not include restraint enforcement) do not excuse delay where the person concerned is a director and shareholder whose own financial interests are affected.

This case provides important guidance on restraint of trade enforcement in South African employment law. It reinforces that: (1) applicants seeking urgent relief to enforce restraints must act promptly and cannot create their own urgency through delay; (2) mere access to customer information and confidential data is insufficient - the employer must prove actual customer connections and relationships that enable the former employee to induce customers to follow; (3) the onus structure in restraint cases requires the employer to first establish protectable interests (particularly that trade connections exist which can be exploited) before the onus shifts to the employee to prove unreasonableness; (4) confidential information and trade connections are interlinked - confidential information has limited value without the relationships to exploit it; and (5) courts will scrutinize the factual basis for claimed protectable interests, requiring evidence of actual customer relationships, frequency of contact, personal connections, and potential for customer diversion, rather than accepting generic allegations.