JSE-listed Business Connexion (BCX) is standing behind its practice of requiring employees to sign restraints of trade, despite losing a High Court application against IBM to enforce such a restraint.
CEO Peter Watt says - while he has not seen the judgement - restraints the company has in place are "reasonable and logical". He questioned the judge`s decision as the company`s restraints had "stood up well over the years".
"There must have been something else that the judge took into account," he says.
Last Thursday, Judge Snyders found in favour of IBM SA and a former BCX employee and dismissed the application with costs. Watt says it is standard practice for the company to endeavour to enforce restraints against both the company and the employee.
BCX, seeking to enforce a restraint of trade, had asked the court to rule that a former employee, Thapelo Mokoma, could not be employed by any of its competitors in SA for a year. It also sought to prevent him from "using or disclosing" BCX confidential information for a year.
However, IBM SA and Mokoma state in court papers, which ITWeb has in its possession, that BCX`s application was based on flawed merits.
Confidential information
Mokoma, during his employ, had access to a pool of seven state entities, with which BCX was working. It was information around his dealings with these clients the company sought to protect. However, IBM`s court papers state Mokoma has undertaken not to have contact with any of these clients.
Moreover, IBM argued, as Mokoma served clients in the public sector, which has a transparent tender process, he did not hold any confidential information. IBM also argued Mokoma was "caught up in a well-publicised squabble between BCX and IBM involving alleged poaching of employees".
BCX contended, however, that Mokoma had built relationships with key government people.
Furthermore, "the first respondent [Mokoma] has knowledge of the applicant`s highly sensitive and confidential business information trade secrets," BCX alleged.
IBM, however, questioned the motive behind the court action: "It is clear, regardless of the fact that Mokoma in fact poses no threat to any BCX interest, BCX has chosen to make an example of Mokoma to discourage staff from resigning. This is not a proper basis on which to enforce a restraint of trade," IBM stated in its papers.
IBM argued that a company cannot prevent an employee from taking their skills with them when they leave. It also points to the skills shortage in the industry, stating: "There are good economic reasons not to uphold blanket restraint provisions in employment contracts within the industry where there is no need for such restraints."
Watt says BCX has a fundamental right to protect its skills and training, especially in situations where the company has invested heavily in training. In his commentary on the company`s results released yesterday, Watt also referred to the skills shortage.
"The skills shortage in the local ICT sector continued to worsen and we had to compete in an increasingly competitive local market for technical expertise. This also put pressure on our operating expenses."
IBM would not comment on the matter.
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