Yovanka Torrente and Another v Grant Monaghan and Associates Incorporated

The respondent operated a medical orthotic, prosthetics and podiatry practice established in 2013, with a head office in Sandton and operational offices in Parkwood and Mayfair. The first appellant was employed by the respondent from 2 January 2018 as a qualified orthotist and prosthetist after being trained as a student intern from 2017. The respondent claimed to have invested approximately R 1.5 million in her training. The employment contract contained a restraint of trade clause prohibiting the appellant from, for two years after termination, competing within the greater Gauteng area, canvassing or enticing employees, patients or suppliers, or using confidential business information. On 21 December 2022, the appellant resigned with her last day being 20 January 2023. During November-December 2022, while still employed, the appellant: received WhatsApp messages about opening a new practice in Bedfordview; submitted medical aid claims under her own practice number (the second appellant) for the respondent's patients; provided her personal contact details to patients; informed referring doctors about her new practice opening in January 2023; and attempted to recruit the respondent's employees. The respondent applied to enforce the restraint of trade agreement.

• Whether the respondent possessed a legitimate protectable interest justifying enforcement of the restraint of trade clause
• Whether the restraint of trade agreement was contrary to public policy
• Whether the employee had sufficient personal knowledge and influence over customers and suppliers to constitute a protectable interest
• What constitutes a reasonable restraint in balancing pacta sunt servanda against the constitutional right to freedom of trade, occupation and profession under section 22 of the Constitution

The appeal against the order of the court a quo of 10 February 2023 was dismissed with costs. The appeal against the order of 17 March 2023 (JA25/23) was dismissed with no order as to costs as it was rendered moot by the decision on the merits. The order of the court a quo remained in force, interdicting and restraining the appellants for one year from 10 February 2023 to 9 February 2024 from conducting business within a 27 km radius of the respondent's premises, employing the respondent's employees, or soliciting/enticing employees, patients, customers or suppliers of the respondent.

A protectable interest justifying enforcement of a restraint of trade clause exists where, on the facts, the attachment between the employee and the employer's customers/suppliers is of such a nature that the employee would be able to induce these customers to follow them into a new business. This is a fact-based enquiry that depends on factors including the employee's duties, frequency and duration of contact with clients, knowledge of business requirements, and relationships built during employment. When evaluating reasonableness of a restraint, courts must balance pacta sunt servanda against the section 22 constitutional right to freedom of trade by carefully examining the nature of activity prevented, the geographical area of operation, and the overall balance of competing interests between parties. Courts may modify overly broad contractual restraints to craft narrower restrictions that achieve an appropriate constitutional balance.

The Court noted that the respondent had invested approximately R 1.5 million in training the appellant, though this was not central to the ratio decidendi. The Court also observed that the appellant's conduct in providing her own practice details to referring doctors, submitting medical aid claims under her new practice number while still employed, and attempting to recruit employees demonstrated her intentions and the value of her connections, which supported the factual findings regarding protectable interest. The judgment indicates that costs were appropriately awarded on appeal even though the court a quo had made no costs order, given that the appellants had been unsuccessful below but chose to prosecute an appeal.

This case provides important guidance on the enforcement of restraint of trade agreements in the South African labour context, particularly in professional services industries. It clarifies the test for establishing a protectable interest based on employee-customer relationships and demonstrates how courts should balance contractual obligations (pacta sunt servanda) against constitutional rights to freedom of trade under section 22 of the Constitution. The case illustrates that courts will examine the employee's actual conduct and connections with clients as evidence of protectable interests, and that pre-resignation conduct seeking to divert customers and employees will support enforcement. It also demonstrates the court's willingness to craft narrower, more reasonable restraints than those contained in the original contract to achieve constitutional balance.