Value Logistics Ltd v Kuhn

Restraints can have unintended consequences and high court found that what distinguishes clause 23 from a covenant in restraint of trade in an employment contract is that the employee, without being a party thereto and without having any knowledge thereof will be prohibited from taking up employment with another company.


Restraints unintended consequences considered by high court and a restraint order was granted and former employee ordered to return confidential documents. 


(2854/2020) [2021] ZAECPEHC 1 (12 January 2021)


Granted application in part – see below


NJ Mullins AJ

Date Heard: 8 December 2020
Date Delivered: 12 January 2021

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‘[90] Another factor to be taken into account is that the FML Agreement arose out of the peculiar circumstances dealt with above. It was a temporary arrangement intended to be of relatively short duration. To embargo all the Applicant’s employees for a period of two years after the termination of the FML Agreement, including those who might be employed after the date of termination and who never had any contact with the Second Respondent, from taking up employment with the Second Respondent is, in my view, indefensible and the clause is accordingly unenforceable.

[91] I must hasten to add that my decision must not be construed as a finding that all non-solicitation clauses are bad in law. Counsel for the Respondents did not refer me to any South African authority directly on the point, nor was I able to find any. My finding is confined by the specific circumstances of this case.”

Quotations from judgment

Note: Footnotes omitted and emphasis added


Court summary