Court rules in company’s favour as it finds ‘exec cannot work for ex-employer’s rivals’

A health and safety training company has the right to enforce a 12-month restraint-of-trade agreement against a former star employee and the rival company she joined on resigning, the High Court in Pretoria has ruled.

Giving reasons for an earlier ruling, Acting Judge TS Madima confirmed his order interdicting a former sales executive at Action Training Academy (ATA), Marelize Coetzee, from remaining in the employ of rival company Absolute Health Services (AHS) without the consent of ATA’s director.

Coetzee was also interdicted from using or disclosing any of her former employer’s confidential information at any time.

The judge said it was clear Coetzee had been a valuable employee during the eight years she worked for ATA, had developed, nurtured and maintained a number of important trade and customer connections and was privy to all facts of ATA’s business.

She had won the sales-person of-the-year award in 2016 and was earning “a mouthwatering sum” by the time she left ATA in July last year.

He said Coetzee was “for all intents and purposes” pivotal to the business success of ATA. When ATA discovered, by chance, that Coetzee had started working for a new rival company, they sought an undertaking that she would not breach the restraint of trade agreement she had signed and would stop working for AHS, but she refused.

She claimed ATA had repudiated their contract of employment and could no longer rely on the “unreasonable” confidentiality undertaking.

Coetzee stated that ATA did not possess any unique sales methods, systems or marketing strategies that justified protection and her undertaking was therefore not enforceable.

But the judge found that Coetzee had signed the restraint of trade agreement and resigned willingly.

He said Coetzee did not seem to take the undertaking seriously when she took up employment with a direct competitor, where she had the same position.

He said Coetzee must honour undertakings she had made and should not be allowed to benefit unduly from the toil of others.