RESTRAINT OF TRADE: DIVERTING PATIENTS TO NEW PRACTICE
Jonathan Goldberg- 2 days ago
- 2 min read
In TORRENTE AND ANOTHER V GRANT MONAGHAN AND ASSOCIATES INCORPORATED (JA 45/23 & JA 25/23) [2024] ZALAC 3 (23 JANUARY 2024), the employee, a qualified orthotist and prosthetist, appealed against the enforcement of a restraint of trade clause in her employment contract. The employer, Grant Monaghan and Associates Incorporated, sought to prevent her from competing with their business, soliciting customers or employees, and using their confidential information. The employee had worked for the employer from 2018 to 2023 before starting her own practice, Yovanka Torrente and Associates Incorporated.
The restraint of trade clause in question restricted the employee from engaging in similar business activities within Gauteng for two years after her resignation, which took effect on 20 January 2023. The Labour Court (LC) initially granted the employer's application but modified the restraint to one year within a 27-kilometre radius of the employer’s premises, rather than all of Gauteng.
The employee appealed this decision to the Labour Appeal Court (LAC), arguing that the employer lacked a legitimate protectable interest to justify such a restraint. She claimed the restraint was contrary to public policy and infringed upon her constitutional right to choose her profession freely. The employee further contended that the employer's clients and suppliers did not represent the type of business relationships warranting protection under the clause. She also denied having sufficient personal influence to entice customers or employees away from the employer.
The employer countered, asserting that during her employment, the employee had breached her fiduciary duties by promoting her new practice to their patients and using her own practice number to submit claims to medical aid providers. The employer argued that the employee's access to their client database, trade secrets, and business know-how gave her an unfair competitive advantage.
The LAC found that the employee’s conduct, including her connections with the employer’s patients and employees, constituted sufficient grounds for the restraint of trade. The court also held that she had used confidential information for her benefit, making the employer's interests legitimate and protectable. The LAC deemed the modified restraint reasonable, as it balanced the competing interests of both parties and respected constitutional rights.
Ultimately, the LAC upheld the LC’s ruling that the restraint of trade clause was valid and enforceable, dismissing the employee’s appeal with costs.
Join us at our Mid-Year Labour Law Update, where we'll unpack cases like the TORRENTE AND ANOTHER V GRANT MONAGHAN AND ASSOCIATES INCORPORATED (JA 45/23 & JA 25/23) [2024] ZALAC 3 (23 JANUARY 2024) case. This year's theme is Labour Law Evolution: The New Face of Labour Relations & Case Law in Disrupted Businesses. What you'll gain:
Master the Digital Transformation of Labour Law in 2025
200+ Labour Law Cases Unpacked by Jonathan Goldberg
Critical Updates on Upcoming Legislation & NEDLAC Amendments
Navigate Workplace Challenges from the Digital Era to Discrimination Laws
Kommentare