South African High Court: Client Movement Alone Insufficient for Restraint of Trade Breach

The South African High Court, in the recent judgment of *Alec Levin Insurance and Investment Brokers (Pty) Ltd v Van den Berg and Others* [2026] (5 October 2026), clarified that the mere movement of clients to a former employee's new employer does not, in itself, constitute a breach of a non-solicitation restraint of trade clause.

This ruling is highly significant for employers and employees across South Africa, particularly in industries where client relationships are paramount, such as financial services, insurance, and consulting. It reinforces the principle that employers must prove active solicitation by the former employee, rather than simply relying on the fact that clients chose to follow them, to successfully enforce a non-solicitation clause. This places a higher evidentiary burden on employers seeking to enforce such restraints and provides greater clarity for employees navigating post-employment restrictions.

Restraint of trade clauses are governed by common law in South Africa, with the leading authority being the Constitutional Court's decision in *Basson v Chilwan* 1993 (3) SA 742 (A), which established the test for reasonableness. The High Court, as a superior court, applies and interprets these established principles. Non-solicitation clauses aim to protect an employer's proprietary interests, such as client connections and trade secrets, but must be reasonable in scope and duration. The judgment likely delves into the critical distinction between active solicitation (which is generally prohibited by such clauses) and the passive acceptance of business from clients who independently choose to follow a former employee, which is often not considered a breach.

The key parties in this matter are Alec Levin Insurance and Investment Brokers (Pty) Ltd, the former employer, and Van den Berg and Others, who are the former employee(s) and potentially their new employer. The High Court served as the adjudicating body, providing this important clarification on the interpretation and enforcement of non-solicitation clauses.

Attorneys drafting or advising on restraint of trade agreements must ensure that non-solicitation clauses are precisely worded to define what constitutes prohibited conduct, focusing on active steps taken by the employee. Employers should understand that proving a breach requires concrete evidence of active solicitation, not just client migration, and should develop robust evidence-gathering strategies. Employees, conversely, gain clarity on their rights regarding clients who independently choose to follow them, provided they have not actively solicited them. Businesses should review their employment contracts and enforcement strategies in light of this clarification to ensure compliance and effectiveness.