A restraint is specifically designed to protect the interests of the employer and this agreement is put in place to protect their customer relationships and intellectual property. The clause prohibits an employee from engaging with direct competitors or from competing with the business of the employer for a specific period and within a certain geographical area after the employment contract has been terminated.
It is important to note that this type of clause is regulated by the law of contract and not by the labour law and as such cannot be referred to the CCMA for assistance.
The courts have confirmed that when a person seeks to enforce a restraint they need only invoke the contract and prove a breach of its terms. The respondent would have to prove that the agreement is not enforceable due to it being unreasonable. Public policy is also considered, in other words, that a contract was entered and must be honoured by both parties.
There are four main principles that the courts use to determine if a restraint is reasonable: