A Shoprite Checkers employee who had hopes of furthering his career with another retail competitor business will not be able to do so for at least another year after a covenant of confidentiality and a restraint of trade order was validated by the Western Cape High Court.
The employee was offered a job at Clicks and was to start on April 3, 2023.
However, due to a clause in his employment contract with Shoprite, his would-be new employer was considered a “significant and direct competitor”, selling, among other things, the same pharmaceutical and household products as Shoprite.
He could not take up the new position as Shoprite argued he held trade secrets.
The employee, a design planner who had been in the position since 2021, was awarded a bursary by Shoprite to enable him to obtain his Honours Degree from Stellenbosch University.
“After that, he started working for (Shoprite) as a trainee in its logistics division.
“On 1 July 2021, he was employed as a Design Planner. At this time, he signed his employment contract with the two covenants therein. The (employee) averred that he was underpaid, did not have a career path, and had no prospects of advancement with the applicant.
“These were the reasons for his resignation. In summary, the restraint prohibits the (employee) from being employed by any business that sells and distributes the same products as the applicant through retail chain stores,” the judgment read.
Shoprite undertook to re-appoint him into his old position, should his restraint be enforced, but this offer was rejected.
On April 14, 2023, Western Cape High Court Judge Derek Wille granted an interim order in favour of Shoprite which interdicted and restrained the employee from disclosing to any person, including Clicks, any confidential and proprietary information of Shoprite, including but not limited to confidential information concerning the business, its operations, finances, information systems, policies, practices, planning, purchases, pricing, sales, suppliers, stocks, and other confidential matters.
The employee was interdicted and restrained “for a period of one year from the date of termination of his appointment with the applicant until 2 April 2024, and within the Republic of South Africa, whether alone or with any other person, and whether as an agent, employee, consultant in a partnership or as a company, body corporate, franchiser or franchisee, or in any other similar capacity, from being engaged, retained, employed or having a material interest in any business, enterprise, undertaking or activity, carrying on business involving the distribution and/or sale through retail chain stores or otherwise of any food or related products, handled products, furniture, beverages, pharmaceuticals or any other product, product category or other items that are distributed or sold through the operations the company or any associated company, including but not limited to the business of the second respondent,” the interim order read.
Shoprite’s case was that the employee must be contractually held to his agreement with them because they partially educated him and entrusted him with its confidential information.
Accordingly, it was argued that his undertakings with them must be honoured.
Cape Times