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Post Info TOPIC: Restraint of Trade.
Anonymous

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Restraint of Trade.
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My wife was offered a job at a company with better basic salary plus commission. Her current Employer Gave her a lawyers letter saying that there is a restraint of trade in her contract and that she can not resign or he will take her to court. She is a sales rep for paving bricks where her current employer has a huge variety. The new company only has one of the same products. Her current employers also does not want to match the salary or the commission that she would have gotten at the new company. What can she do?



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Labour Protect

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Good day 

The law of contract regulates restraint of trade agreements. This matter therefore cannot be resolved in the CCMA. 

The restraint of trade agreement is a tool used by the employer in order to protect his business against loss of intellectual property, clients, reputation and good will. It is important to note. Restraint of trade agreements that have been signed are legally enforceable and not to be taken lightly. If an employee seeks a remove the obligation placed upon her they will have to resolve the dispute in court. The onus of proving that a restraint of trade is contrary to the public interest, lies in the employee.

The courts take into account a number of factors such as; the time period of the restraint, the geographic area of the business domain, circumstances under which the employee signed, the nature of commercial interest the employer seeks to protect and how would it affect your ability to make a living. These are known as  public interest considerations. The courts have to balance public interest considerations as well as try to uphold the obligations of the contract. 

Previous judgments that shed light on restraint of trade agreements. In Automotive Tooling Systems v Wilkens (2002) SCA 128 (RSA)- Skill sets which the employer sought to protect were in fact part of the employees general stock of skill and knowledge. In Reddy v Siemens(2006) SCA 164 (RSA) - If in possession of trade secrets and confidential information it could be used to the disadvantage of her old employer when contracting with a new employer. The employee has to prove that no special skills or sensitive information provided by the ex-employer will be given  to the competitor. The courts will decide if the restrain of trade is unreasonable.

The courts seem to be favoring restrain of trade that is in essence more narrow and specific compared to broader clauses.

I would advise she seeks out her current employer and tries to come to an agreement. If the negotiation fails then the only other option would be to seek the aid of the courts.

LP

 



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