South Africa: A Manifestly Overbroad Restraint And The "Exaggerated Sword Of Damocles"

Last Updated: 8 December 2011
Article by Theo Broodryk

Most Read Contributor in South Africa, November 2017

In the Labour Court decision of Henred Freuhauf (Pty) Ltd v Davel & another (2011) 32 ILJ 618 (LC), Lagrange J held that employers should refrain from drafting overbroad restraints and then expect the court to reformulate it into something more reasonable.

The sword of Damocles

Dionysius was a fourth century BC tyrant of Syracuse, Italy and Damocles was a courtier in his court. Damocles envied Dionysius, particularly his power and wealth and all the luxuries afforded to someone of Dionysius' status. One day Dionysius offered Damocles the opportunity to switch places. Damocles took up the offer and enjoyed himself immeasurably, that is until he became aware of the sword that dangled above the throne, attached to the ceiling by a single hair of a horse's tail. Consumed by constant fear, Damocles pleaded for his release from the throne. By hanging the sword above the throne, Dionysius had successfully conveyed to Damocles a sense of what life as ruler was really like.

The facts

In Henred Freuhauf (Pty) Ltd v Davel & another (2011) 32 ILJ 618 (LC), the applicant employer sought an urgent interdict for the breach of a restraint of trade agreement by the first respondent employee. The employer has as its business the sale of spare parts for vehicle trailers. The employee had been employed by the employer as a sales representative to sell spare parts, which were either distributed or manufactured by the employer.

On 3 August 2006, the employee signed a restraint of trade agreement which prevented him, from the date of termination of his employment, from competing with the employer's business for a period of three years throughout the whole country.

The employee had originally worked for the employer in Vryheid, in the Free State, until the end of March 2009 after which he was transferred to work in the same capacity in Durban. On 1 December 2009, the employee resigned and, soon after his resignation, was employed by a competitor in direct competition with the employer.

Protectable interest

Lagrange J held that knowledge of the spare parts components of the employer's business was something that could be acquired in a relatively short amount of time, that the employee had no demonstrable knowledge of the applicant's margins, and that information about the employer's prices appeared to have been freely available.

Lagrange J further found that there was nothing on the facts to suggest that the market for trailer parts was one that required specialist technical skills and access to confidential information in order to pursue a successful sales strategy. He held that there was nothing to suggest that much value could be attached to the employee's relationship with customers as transactions were elementary by nature and that it is difficult to see how any customer goodwill was generated by them.

For these reasons, Lagrange J came to the conclusion that the employer, on the facts, did not have an interest worthy of protection.

Redrafting of overbroad restraints

The restraint agreement in this case contained a provision in terms of which it was recorded that each undertaking in the agreement is independent, separate and divisible and that should a court of law find that any restraint in the agreement was unenforceable, it would not lapse but would be regarded as having been amended to the extent necessary to render it enforceable in terms of the court's judgment. It is on this basis that the legal representative of the applicant employer submitted that "the applicant would be content if the restraint were to be imposed for a period of only 12 months in the Durban and Vryheid regions".

Apart from the fact that a modification of the restraint along the lines proposed by the employer's legal representative would require the employee to relocate if he wished to pursue employment in the industry and given the absence of a protectable interest, Lagrange J commented as follows:

"Moreover, the practice of cutting and trimming a manifestly overbroad restraint at the behest of the party which drafted it is not a practice the court should encourage. It would be wrong to promote the practice of drafting wide ranging restraints, which are only reformulated into more reasonable prohibitions when the matter comes before the court, whereas up to that point the sweeping scope of the provision hangs over the employee like an exaggerated sword of Damocles."

Conclusion of Lagrange J

The finding of Lagrange J therefore restates and reinforces the court's reluctance to cure an agreement in restraint of trade that is too vast in its scope and application by reading it down to something more reasonable.

It appears that the message which Lagrange J sought to relay through his judgment was that employers should refrain from drafting an overbroad restraint that clearly has as its consequence an employee living in fear of its implementation, where the implementation of the prohibitions contained in the restraint would effectively, and unjustifiably, render ineffective the exercise of the restrainee's right to be a productive worker. Such fear, hovering over the employee like the Sword of Damocles, cannot be justified only by an expectation on the part of the employer that the restraint will be cropped to more reasonable terms by the court.

Putting things in perspective

Does the judgment of Lagrange J mean that an employer has to draft its restraint of trade in very narrow terms and hope that it will suffice to enforce sometime in the future?

In Den Braven SA (Pty) Ltd v Pillay and another (2008) 3 All SA 518 (D), MJD Wallis AJ held that "one of the perennial problems in the field of restraint if trade agreements has been that of over-breadth. At the stage when the contract is concluded it is often difficult to foresee with any degree of exactness which interests of the employer will warrant protection after termination of the employment and what actions by the employee may constitute an infringement of those interests. This is always a difficult question when one is dealing with an ongoing relationship, such as employment, in the context of a business which is constrained by market forces to adapt its operations to meet current exigencies. Both the employment relationship and the nature of the business tend to change over time. In order to accommodate this, the usual result is that those who draft restraint of trade undertakings tend to err on the side of generosity. That is compounded by their endeavours to foresee and forestall the endeavours that former employees may adopt to circumvent restraint undertakings. In the result, when the time for enforcement arose, whilst the conduct of the former employee might fall squarely within the terms of the restraint, its breadth would provide fertile ground for an argument that it was unreasonable and hence unenforceable."

Wallis AJ held that it is wrong for courts to criticize those who draft restraint of trade agreements in very broad terms for doing so. He states that "...both the employment relationship and the conduct of business is dynamic and ever-changing. It is wholly undesirable and inconvenient to both the employer and the employee to have to engage in an on-going and relatively continuous process of renegotiating the terms of a restraint undertaking in order to accommodate new elements that enter into their relationship...Every possibility must be covered and this results in great detail and unfortunate prolixity. In drafting account must be taken of an extensive body of case law that is by no means consistent. Accordingly they should not be blamed, when the courts said under the old dispensation that an intention that different portions of an over-broad agreement needed to stand on their own if severability was to operate, for inserting a clause proclaiming that fact as clearly and comprehensively as possible. Nor should they be criticized for including a string of acknowledgements of dubious value when the reported cases suggest that nonetheless there may be some value in the party sought to be restrained having made such acknowledgements. After all the task of the draftsmen is to secure as best they can that their client will enjoy protection at the end of the day."


The judgments discussed above are not, in our view, mutually exclusive; rather, they seem to congregate in the principle that there is nothing wrong with a restraint that seeks to cover all existing and future eventualities, provided only that its terms do not give rise to the inference that it was intended to operate in terrorem. The court will not lightly draw such an inference particularly where there is an entirely plausible alternative, such as the one advocated by Wallis AJ in Den Braven, that the draftsman was seeking to be as prescient as possible to cover all potential situations in which the employer's interests might need protection against the possible conduct of the particular employee.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions