High Court ZA: Alec Levin Insurance Non-Solicitation Ruling on Client Movement

• The High Court ruled in Alec Levin Insurance and Investment Brokers (Pty) Ltd v Van den Berg and Others on October 5, 2026.
• The judgment clarified that a non-solicitation restraint is not breached merely because clients follow a departing employee.
• Client movement alone is insufficient proof of active solicitation, according to the court.
• Employers must provide concrete evidence of active solicitation to enforce non-solicitation clauses.
• This ruling impacts the enforcement of restraint of trade agreements in South Africa.

The judgment clarifies that for a non-solicitation clause to be deemed violated, more than just clients moving to a former employee is required.

The High Court recently delivered a significant judgment in the case of Alec Levin Insurance and Investment Brokers (Pty) Ltd v Van den Berg and Others, handed down on October 5, 2026. This ruling provides crucial clarity regarding the enforcement of non-solicitation clauses, particularly in situations where employees depart to join competitors.

The dispute centered on whether the mere fact of clients following a former employee to a new venture constitutes a breach of a non-solicitation agreement. Such clauses are common in employment contracts, aiming to protect a company's client base from being poached by ex-staff members. The court's decision addresses a frequently debated point in South African employment law concerning the practical application of these restraints.

In its determination, the High Court emphasized that a non-solicitation restraint is not automatically breached simply because clients choose to transfer their business to a departing employee's new firm. This finding underscores the principle that client movement alone is not sufficient evidence to prove active solicitation.

The judgment clarifies that for a non-solicitation clause to be deemed violated, more than just clients moving to a former employee is required. This means that employers seeking to enforce such clauses must present concrete evidence of active solicitation, rather than relying solely on the observation that clients have followed their former contact to a new employer. The ruling sets a higher bar for establishing a breach, requiring a demonstration of direct action by the former employee to induce clients to switch.

This decision has notable implications for the enforcement of restraint of trade clauses across South Africa. For employers, it serves as a vital reminder that robust evidence gathering is essential when alleging a breach of a non-solicitation agreement. Simply pointing to a loss of clients or their migration to a former employee's new company will likely be insufficient to secure a favorable judgment.

Conversely, for employees subject to such restraints, the ruling offers a degree of protection. It reinforces the idea that clients have agency and can choose where to take their business, and that an employee should not be automatically penalized if clients independently decide to follow them. This precedent will likely influence how legal professionals advise both employers and departing employees on the scope and enforceability of non-solicitation clauses in the South African context.

This judgment clarifies the burden of proof for employers seeking to enforce non-solicitation clauses, requiring evidence of active solicitation beyond mere client movement. Lawyers advising employers should ensure robust evidence gathering, while those advising departing employees can leverage this precedent to defend against claims based solely on client follow-on.

Source: Original reporting via High Court judgment