Tag: restraint of trade agreement

A restraint of trade is used to protect an Employer’s proprietary interests from being accessed by an Employer’s competitors. The Employer’s proprietary interests include, but are not limited to, trade secrets and confidential information, goodwill, and skills. An enforceable restraint of trade will prevent an Employee from joining an Employer’s direct competitor if the Employee has acquired confidential information and trade secrets from the former Employer.

The Labour Court in South Africa recently considered whether a promotion nullified an original restraint of trade and other novel arguments raised by an employee who wanted to escape liability under a restrictive covenant contained in his employment contract.

Are restraint of trade agreements transferred in terms of a section 197 transfer of business as a going concern? A restraint of trade agreement or undertaking is only transferred in terms of section 197 of the Labour Relations Act if it constitutes a term of a transferring contract of employment.