The Labour Court’s recent judgment in TWK Agri (Pty) Ltd v De Lange and Another [2025] (LC) provides a strong reaffirmation of the enforceability of restraint of trade and confidentiality agreements — even where a former employee claims they did not actively solicit clients.
The decision confirms that restraint agreements serve as a critical mechanism for protecting an employer against the inherent and often “unpoliceable” risk that confidential information and client relationships may be used by a competitor once an employee departs.
Background to the Dispute
TWK Agri approached the Labour Court on an urgent basis seeking final interdictory relief to enforce a restraint of trade and confidentiality agreement against its former employee, Mr De Lange, who had resigned and taken up employment with a direct competitor, Intersure Financial Services (Pty) Ltd.
During his employment as a short-term insurance broker, Mr De Lange had extensive access to TWK Agri’s confidential client data, business information, and trade connections. Within two months of his departure, several TWK Agri clients terminated their insurance policies and transferred their business to Intersure.
TWK Agri alleged that this movement of clients resulted from solicitation by the former employee. Mr De Lange denied this, asserting that the clients had independently approached him due to dissatisfaction with TWK Agri’s service. He further disputed the enforceability of the restraint, arguing that TWK Agri lacked a protectable interest and that he had not validly signed the agreement.
The Labour Court’s Findings
The Labour Court reaffirmed established principles governing restraint of trade agreements. While such restraints limit an individual’s freedom to work, they remain enforceable where they are reasonable and aimed at protecting legitimate proprietary interests.
The Court confirmed that an employer’s proprietary interests include:
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Confidential information and trade secrets, and
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Trade connections, including client relationships developed during employment.
Whether information qualifies as confidential is an objective factual enquiry determined on the specific circumstances of each case.
Importantly, the Court held that TWK Agri was not required to prove actual disclosure of confidential information. Relying on Constitutional Court authority, the Court accepted that where a former employee joins a competitor, the risk of disclosure alone is sufficient to justify enforcement of a restraint. This reflects the well-established “customer contact” doctrine.
Indirect Solicitation Is Still Solicitation
A key aspect of the judgment is the Court’s approach to solicitation. The Court found that it was irrelevant whether the former employee initiated contact with TWK Agri’s clients or whether they approached him first.
What mattered was that:
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The employee joined a competitor operating in the same market and geographic area;
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He remained in contact with former clients of TWK Agri; and
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He did not refuse or distance himself from those clients once approached.
On this basis, the Court concluded that the conduct amounted to indirect solicitation, which fell squarely within the conduct prohibited by the restraint agreement.
The Court accordingly granted final interdictory relief, restraining the former employee from engaging in competitive activities and from using or disclosing confidential information for the duration of the restraint period.
Why This Decision Matters for Employers
This judgment reinforces several important principles for employers:
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Restraint of trade agreements are valid and enforceable unless their enforcement would be unreasonable.
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Employers are entitled to protect confidential information and customer relationships developed during employment.
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A restraint may be breached even without direct solicitation – passive acceptance of business from former clients may be sufficient.
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Courts will enforce restraints where they are reasonable in scope, duration, and geography, and where legitimate commercial interests are at stake.
Practical Takeaway
Employers should ensure that restraint of trade and confidentiality provisions are carefully drafted, tailored to the role and industry, and supported by clear evidence of protectable interests. When properly structured, these agreements remain a powerful and enforceable tool to protect business continuity and competitive advantage.
O’Reilly Law advises employers, founders, and high-growth businesses on the drafting, enforcement, and defence of restraint of trade and confidentiality agreements.
If you require strategic guidance on protecting your business interests or enforcing post-employment restraints, feel free to contact us.
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