Tag Archives: Restraint of Trade

Agreements Online Trade restraint May wk 1

Keep your Restraint of Trade Legal

Are restraints of trade legal? Can they be enforced? Should I be worried about signing a restraint? Or is it true that a restraint of trade isn’t worth the paper it’s written on? The short answer is: restraints of trade are indeed legal.

Restraints are a common employment requirement and form an integral part of many employment contracts. Without a restraint in place, any employee who has access to key confidential information could cause serious damage to the business if s/he decided to leave and join (or startup) the opposition. But it is of critical importance that the restraint of trade has been properly worded if it is to stand up to the Courts’ scrutiny. South African law recognises the employer’s right to enforce restraints of trade in order to protect legitimate proprietary interests. But these interests must be balanced against the employee’s right to work and to earn a living.

Protecting the Secret – Part IV

Previously, in Protecting the Secret… We left the employer and employee mulling the latest revelation: Restraints of Trade can be enforced, but only if the employer has a legitimate proprietary interest, worthy of legal protection, that will be jeopardized if the employee joins the opposition. Is the employer motivated by vindictiveness, or a genuine desire to protect the valuable confidential information that was given to the employee? Is the employee on the verge of gleefully transferring a few terabytes worth of confidential information to the competitor, or simply looking forward to earning an honest salary in exchange for a hard day’s work? Does the restraint do more than merely restrict competition?

Protecting the Secret – Part III

Previously, in Protecting the Secret… The employer and ex-employee are in the ring, slowly circling each other, acutely aware of their opponent’s every movement, each bracing for the next blow. The employer has taken an early lead, but the beads of sweat evident on his forehead give away his uncertainty. The ex-employee has lost some of the confidence and bravado that was evident before The Great Reveal: restraints of trade can be enforced. But clings grimly to the glimmer of hope inherent in the proviso to The Great Reveal: not all restraints of trade are enforceable. They can be struck down if found to be contrary to public policy. The crowd holds its collective breath, with the employers rooting for the sanctity of contract and the employees cheering loudly in support of freedom of trade. Who will gain the upper hand and emerge the victor?

Protecting the Secret – Part II

Previously, in Protecting the Secret… Our protagonists, the employer and the employee, negotiated an employment contract under false pretexts. While the employer gushed about benefits, bonuses and increases, in reality the benefit was getting to the office early enough to nab the shaded parking, the bonus comprised the rare lunch hour, and the only thing increasing was the employee’s stress level. Meanwhile, the employee’s sales pitch at the job interview, punting an eagerness to learn and a burning desire to become one with the team, masked an ulterior motive: minimum input at maximum salary.