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.