Couple restrained from using trade secrets
A freight company has successfully restrained a former employee and his wife from competing and diverting business away from it.
The former employee had close relationships with 151 clients and the freight company was concerned he would solicit them away.
A Business Day report says last week, the Gauteng High Court (Johannesburg) granted the freight company its urgent interdict to prohibit the couple from competing.
Rudolph Matthee and his wife, Elize, ran a transport and freight forwarding company, Clyroscan, which in 2022 ran into financial distress. Matthee then approached another freight company, Emlink, for assistance.
In July 2022, Emlink entered into an agreement with Matthee to bring in clients and he would then receive 10% of the Emlink shares and remuneration.
Both of the Matthees had access to Emlink’s database and other interests as part of their work with the company.
Legally, these are trade secrets. The Matthees opted to leave Emlink’s employment in October 2023. Emlink said that it had obtained evidence that the Matthees were in breach of the restraint clauses they agreed to in 2022.
Emlink then approached the High Court for an urgent interdict to stop the continuing breach it said it believed the Matthees were perpetuating.
Last week, Gauteng High Court (Johannesburg) Judge Leicester Adams ruled in Emlink’s favour, restraining the Matthees.
‘As (an) agent of Emlink,’ Adams wrote, ‘(Rudolph Matthee) cannot make a secret profit out of anything ... which belongs to (Emlink) ... The (Matthees) have throughout had personal contact with clients of Emlink and (Rudolph Matthee), in particular, has personal relationships with the said clients which he cannot exploit to (Emlink’s) detriment.’
According to the Business Day report, Adams examined (unspecified) evidence put up by Emlink and concluded it ‘confirms that the (Matthees) are making use of their relationships and Emlink’s confidential information and trade secrets to solicit and canvass clients for third-party entities, including a company seemingly under the control of (Rudolph Matthee’s) son.’
The judge said that the Matthees did not dispute that they ‘are causing to be diverted loads for transport for clients of Emlink to its competitors and this they do by making use of such trade secrets and confidential information’.
The restraint agreement was ‘unequivocal’, protecting Emlink’s intellectual property rights. Adams said that the Matthees are ‘not entitled to unlawfully compete with Emlink by using its confidential information and trade secrets’.
He ruled Emlink had made out a case and ordered the Matthees be prohibited for two years from being involved in transport services to any of Emlink’s clients. He also ordered them to provide details of the clients they had been in contact with, including to the point of handing over administrator control of WhatsApp groups.
The Matthees were ordered to pay Emlink’s legal costs.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.