Cape Town - The Western Cape High Court has ruled that a restraint of trade provision with the sole aim of stifling competition is against public policy and is unenforceable.
Judge James Lekhuleni made the ruling in a case where the Crazy Splash Swim School in Worcester sought to enforce a purported restraint of trade agreement against three respondents: swimming coach Talitha Nortje and two swimming clubs.
The two swimming clubs are Worcester Aquatics, a competitive swimming club in Worcester, and Lane Leader Team Stellenbosch, another competitive swimming club offering professional swimming coaching services to its members which also offers services in Worcester.
Crazy Splash had asked the court for an interdict against Nortje and the two clubs and to stop Nortje from rendering swimming services within the Worcester area or anywhere within a radius of 50km for two years, arguing that this was in an orally agreed restraint of trade agreement.
Crazy Splash also wanted Nortje to stop advertising her swimming school, Let’s Swim, with Worcester Aquatics or any other swimming coaching by herself, on social media.
When Nortje began working with Crazy Splash in March 2016, she only had a verbal contract of employment. However, Carla Kock, a former Crazy Splash employee, bought the company and sent a written employment contract to Nortje in April 2021.
Nortje objected to the inclusion of the restraint of trade in the contract and when, after a lot of back and forth, Kock insisted, Nortje resigned in November 2022 and branched off on her own to coach swimming privately and still work with Worcester Aquatics.
Meanwhile, Kock approached the high court with the case.
Nortje told the court that she never agreed to any restraint of trade during the entire duration of her employment with Crazy Swim, nor was she specifically requested to agree to it before Kock becoming the owner.
She said she would not agree to such a clause, as she is a swimming instructor and this is her only means of generating an income.
Nortje argued that since March 2016 when she started at Crazy Swim, she had simultaneously worked under the Worcester Aquatics, and that Crazy Swim had always been aware of this.
She argued that it was entirely unclear to her on what basis Crazy Swim sought to enforce a non-existent restraint of trade against her and to interdict the Worcester Aquatics from continuing to work with her.
Judge Lekhuleni said Crazy Swim failed to produce any written employment contract with a restraint of trade clause under its previous owner to confirm its allegations. He said it could not be argued that Nortje was taking any trade secrets, confidential information, or connections from Crazy Swim.
Dismissing the application, the judge said: “In my view, restraining the first respondent to practise her profession under these circumstances, would conflict with section 22 of the Constitution, which guarantees her right to freedom of trade, occupation, and profession.”