Restraint of trade blow for top boss

A senior Eastern Cape executive who broke his company-imposed restraint of trade to join a competitor and poached a client has lost his new job. This emerged in a judgment released by Judge Mandela Makaula in the Grahamstown High Court this month. The judge restrained Aloisius Alexander from releasing confidential information for 10 years about NRG Office Solutions (Pty) Ltd.

NRG went to court after Alexander, the company’s former group major account manager, resigned and joined their competitor, Aloe Office and Business Equipment trading as Xerox Queenstown.

Judge Makaula found that Alexander had not denied poaching a client, Senqu Municipality, for Aloe.

Alexander signed a contract with NRG Office Solutions on August 14 2003, where he was employed as a service engineer. He was promoted to branch manager and later to group major account manager on March 1 2014. He did not sign his new NRG contract until he resigned on October 29 2014.

Judge Makaula heard that NRG Office Solutions informed Aloe there was a restraint of trade agreement in place between them and Alexander and, as a result, Aloe terminated Alexander’s services. NRG said Alexander had access to contractual arrangements between them and their suppliers, customers and business conditions, the names of present and prospective suppliers, principals, and customers, and information regarding them, as well as knowing how their business operated.

Alexander said the restraint of trade clause was unconstitutional because it prevented him from carrying out his profession, trade, or engaging in commerce without there being a corresponding interest of the NRG deserving of protection. A clause in Alexander’s contract reads: “...as a consequence of his employment with (Alexander) is precluded from divulging, using or disclosing the trade secrets and confidential information of the applicant during his employment and for a period of 10 years thereafter.”

Makaula found that NRG had established the requirements of an interdict. The judge then ordered that, in the region of the Eastern Cape, Alexander be restrained and interdicted from approaching, advising or contacting in order to, directly or indirectly, solicit the custom of any person or entity who was a customer or was in discussions with NRG Office Solutions during the period of the respondent’s employment with them, until the end of October this year.

Alexander was further interdicted from “disclosing, divulging or making known any of the trade secrets or confidential information” in the Eastern Cape for 10 years from his resignation in 2014.

Alexander said yesterday he is currently unemployed and has tried to apply for work in other provinces. “When I signed my contract with NRG in 2003 it was the first time I had signed a contract and there was no HR person to explain things to me. I did not foresee them doing this 12 years later,” he said. “Aloe terminated my contract to avoid being part of the trial.”