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.

Essence

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

Decision

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

Order:

Granted application in part – see below

Judges

NJ Mullins AJ

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

Related books

Darcy du Toit et al Labour Relations Law: A Comprehensive Guide 6ed 925 pages (LexisNexis 2015) at

Darcy du Toit et al Labour Law Through The Cases – loose-leaf service updated 6 monthly (LexisNexis 2020)

Van Niekerk and Smit (Managing editors) et al [email protected] 5ed (LexisNexis 2019) at

Myburgh and Bosch Reviews in the Labour Courts 1ed (LexisNexis 2016) at

Garbers The New Essential Labour Law Handbook 7th ed (MACE 2019) at 

Reasons

‘[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