Accurate
Country-specific legal content
Drafted with legal expertise for each jurisdiction, far more thorough than AI-generated drafts that copy generic clauses across borders.
BusinessZA
Non-Compete Agreement Template – South Africa
A non-compete agreement restricts a party from competing in a defined market or industry for a set period after leaving a business relationship. Our free South African non-compete agreement template is drafted to meet the enforceability test set by South African courts, protecting legitimate business interests without being an unreasonable restraint of trade.
Free to useInstant PDFNo account required
PDF (free) + editable Word (.docx) with Expert
NON-COMPETE AND RESTRAINT OF TRADE AGREEMENT
EMPLOYER
Meridian Group (Pty) Ltd
14 Fricker Road, Illovo, Johannesburg 2196
Reg 2010/098765/07
Reg 2010/098765/07
By: Thabo Nkosi, Human Resources Director
EMPLOYEE / RESTRAINED PARTY
Ayanda Dlamini
23 Boundary Road, Emmarentia, Johannesburg 2195
ID 9003154800087
ID 9003154800087
Senior Sales Manager
Effective: 25 April 2026
Restraint: twelve (12) months · Republic of South Africa
This Non-Compete and Restraint of Trade Agreement ("Agreement") is entered into as of 25 April 2026 by and between Meridian Group (Pty) Ltd (the "Employer") and Ayanda Dlamini (the "Employee"). This Agreement forms part of the Employee's conditions of employment (which commenced on 1 March 2022) and constitutes good and valuable consideration for the restraint obligations contained herein. This Agreement is governed by the laws of the Republic of South Africa and the common-law principles established by the Supreme Court of Appeal in Magna Alloys and Research (SA) (Pty) Ltd v Ellis 1984 (4) SA 874 (A), as developed in subsequent jurisprudence including Basson v Chilwan 1993 (3) SA 742 (A), Reddy v Siemens Telecommunications (Pty) Ltd 2007 (2) SA 486 (SCA) and the recent Labour Appeal Court decisions in Backsports v Motlhanke (October 2025) and Lucchini v Mahabeer (December 2025).
1.
BACKGROUND AND LEGITIMATE INTEREST
The Employee has been appointed in Senior Sales Manager, which is a senior executive or strategic role with direct access to confidential trade connections, financial information and / or strategic plans. In the course of employment, the Employee will acquire access to valuable confidential information, client relationships, trade connections and business goodwill belonging to the Employer, which together constitute the Employer's legitimate proprietary interests. The Employer has an interest in protecting these assets from exploitation by former employees in direct competition. This Agreement is entered into to protect those interests in a manner that is reasonable in scope, duration and geographic extent.
2.
CONFIDENTIAL INFORMATION
"Confidential Information" means all non-public information of the Employer, including but not limited to: Client lists and contact details, proposal and pricing methodologies, proprietary financial models, strategic business development plans and internal performance data of client engagements.. The Employee shall: (a) hold all Confidential Information in strict confidence during and after employment; (b) not disclose any Confidential Information to any third party without the Employer's prior written consent; and (c) use Confidential Information solely for the Employer's business purposes. Where Confidential Information constitutes personal information under the Protection of Personal Information Act 4 of 2013 (POPIA), the Employee shall additionally comply with Chapter 3 of POPIA. The Employee acknowledges that the Confidential Information has been and will be developed at substantial cost to the Employer and is a material component of its competitive advantage — a protectable interest in the sense recognised by Sibex Engineering Services v Van Wyk 1991 (2) SA 482 (T).
3.
RESTRAINT OF TRADE
For a period of twelve (12) months following the termination of the Employee's employment with the Employer (the "Restraint Period"), however the employment ends and regardless of which party initiated the termination (as confirmed by the Labour Appeal Court in Backsports v Motlhanke 2025), the Employee shall not, within Republic of South Africa, directly or indirectly: (a) Soliciting, servicing or engaging as an employee, director, consultant or advisor of any client in the financial consulting and advisory sector who was a client of the Employer during the Employee's last twelve (12) months of employment; engaging in management or financial consulting services that directly compete with the Employer's core service offering; or using or disclosing any of the Confidential Information for any purpose other than the Employer's business.; or (b) otherwise compete with the Employer's business by exploiting the Confidential Information or client relationships acquired during employment. The Employee acknowledges that this restraint is reasonable because: (i) the duration is appropriate to the protectable interest; (ii) the geographic area corresponds to the Employer's actual business footprint; and (iii) the restricted activities are confined to those in which the Employee was directly engaged or had material exposure.
4.
REASONABLENESS — MAGNA ALLOYS AND BASSON V CHILWAN
The parties acknowledge that under South African law, a restraint of trade clause is presumed valid and enforceable unless the restrained party proves that it is contrary to public policy (Magna Alloys and Research (SA) (Pty) Ltd v Ellis 1984 (4) SA 874 (A)). Public policy in this context requires balancing the Employer's interest in protecting its proprietary assets against the Employee's constitutional right to freely practise their trade or profession under section 22 of the Constitution of the Republic of South Africa, 1996. The court will apply the four-stage Basson v Chilwan test: (a) is there an interest deserving of protection; (b) is that interest threatened by the activity of the restrained party; (c) does the interest weigh up qualitatively and quantitatively against the restraint of the party; and (d) is there another aspect of public policy that requires the restraint to be set aside? If any part of this clause is found unreasonably broad, the parties expressly agree that the court shall apply the blue-pencil doctrine to read down the offending part to what is reasonable, while preserving the balance of the clause.
5.
NON-SOLICITATION
For a period of twelve (12) months following termination of employment, the Employee shall not, directly or indirectly: (a) solicit, canvass, approach or accept work from any client or customer of the Employer with whom the Employee had material contact or dealings in the twelve (12) months preceding termination, for the purpose of providing services competitive with those of the Employer; or (b) solicit, recruit, entice or attempt to employ any employee, contractor or consultant of the Employer with whom the Employee had material contact during employment. This non-solicitation obligation protects the Employer's client goodwill and team stability — recognised as a protectable interest by the Supreme Court of Appeal in Rawlins v Caravantruck (Pty) Ltd 1993 (1) SA 537 (A). The Employee acknowledges that the strength of client relationships and the value of team cohesion is, in itself, a protectable interest distinct from confidential information.
6.
RETURN OF PROPERTY AND INFORMATION
On termination of employment (or earlier on request), the Employee shall promptly return to the Employer all property, equipment, documents, records and materials (in any form, including electronically stored data) belonging to or relating to the Employer's business, including all Confidential Information. The Employee shall not retain any copies, extracts or summaries of Confidential Information. Where personal information has been processed, return or destruction shall comply with POPIA. The Employee shall provide a signed written undertaking confirming compliance with this clause on demand.
7.
GARDEN LEAVE
During the notice period preceding termination of employment, the Employer may, at its sole discretion, place the Employee on garden leave for a period not exceeding three (3) months. During garden leave: (a) the Employee shall remain an employee and shall continue to receive full salary and benefits; (b) the Employee shall not be required to attend the Employer's premises or perform any duties; (c) the Employee shall not engage in any competitive activity or communicate with the Employer's clients or employees without express written consent; and (d) the garden leave period shall be credited towards the Restraint Period, reducing the post-employment restraint duration proportionately. The Employer's exercise of garden leave shall not constitute constructive dismissal.
8.
PRE-JOINING NOTIFICATION
During the Restraint Period, the Employee shall, within five (5) business days of receiving any approach from any competitor, prospective employer or third party regarding employment, consulting, or other engagement that could fall within the scope of this restraint, notify the Employer in writing of: (a) the identity of the approaching party; (b) the nature of the proposed role or engagement; and (c) the anticipated commencement date. The Employer shall, within ten (10) business days of such notification, either (i) confirm the engagement is permissible; (ii) confirm the engagement would constitute a breach; or (iii) propose conditions on which the Employer would consent to (or partially release) the restraint. Failure to notify shall, in itself, constitute a material breach of this Agreement.
9.
RESTRAINT CONSIDERATION PAYMENT
The Employer shall pay the Employee, during the Restraint Period, a monthly restraint consideration equal to 50% of the Employee's last total cost-to-company package immediately preceding termination (the "Restraint Payment"). The Restraint Payment shall be paid in arrears on the last business day of each calendar month, subject to PAYE and other applicable statutory deductions. The Employer's obligation to pay the Restraint Payment terminates immediately on: (a) the Employer giving written notice releasing the Employee from the restraint; or (b) the Employee's material breach of any provision of this Agreement. The parties acknowledge that the Restraint Payment represents ongoing consideration for the restraint, materially strengthening its enforceability under Reddy v Siemens Telecommunications (Pty) Ltd 2007 (2) SA 486 (SCA).
10.
CONVENTIONAL PENALTY (PRE-AGREED DAMAGES)
If the Employee breaches the Restraint of Trade or Non-Solicitation obligations in this Agreement, the Employee shall, without prejudice to the Employer's right to seek an urgent interdict or claim actual damages where greater, pay the Employer a conventional penalty equivalent to 3 months of the Employee's last total cost-to-company package, as liquidated damages for each proven breach. This penalty clause is governed by the Conventional Penalties Act 15 of 1962 and may be reduced by a court if found to be disproportionate to the actual loss suffered by the Employer. Payment of the penalty shall not release the Employee from the ongoing restraint obligations.
11.
FORFEITURE OF UNVESTED BENEFITS
If the Employee materially breaches this Agreement, the Employee shall forfeit all unvested benefits accrued under any incentive compensation, deferred bonus, share option, performance unit or retention scheme offered by the Employer (collectively "Accrued Benefits"), to the extent not yet paid, transferred or exercised. The forfeiture shall be effective from the date of the breach. The parties acknowledge that the Accrued Benefits were granted in partial consideration for the Employee's covenant not to compete, and that forfeiture is a contractual condition rather than a penalty. This provision is consistent with the principles affirmed in Esso Standard SA (Pty) Ltd v Katz 1981 (1) SA 964 (A).
12.
BREACH NOTIFICATION BY THE EMPLOYEE
The Employee undertakes to notify the Employer in writing within five (5) business days of becoming aware of any actual or threatened breach of this Agreement by the Employee, providing all material particulars. Self-notification shall not, in itself, be treated as an admission of liability but shall be considered as a mitigating factor in any subsequent claim by the Employer. Failure to notify shall, in itself, constitute a separate material breach.
13.
CARVE-OUTS — REASONABLE EXCEPTIONS
Nothing in this Agreement shall prevent the Employee from: (a) holding, by way of passive investment, less than five percent (5%) of the issued share capital of any company listed on a recognised stock exchange; (b) carrying on any activity that is materially outside the scope of the Restricted Activities and does not utilise Confidential Information of the Employer; (c) acting as a trustee of a family trust, or as a director of a non-profit organisation, that does not compete with the Employer; or (d) seeking general employment that has been explicitly approved by the Employer in writing. These carve-outs are intended to demonstrate that the Restraint is calibrated to the legitimate proprietary interest of the Employer and is not punitive.
14.
REMEDIES — URGENT INTERDICT
The Employee acknowledges that any breach of this Agreement will cause the Employer irreparable harm for which an award of damages alone would be inadequate. Accordingly, the Employer shall be entitled to seek an urgent final or interim interdict in the High Court of South Africa (under Rule 6(12) of the Uniform Rules of Court) to restrain any actual or threatened breach, without the necessity of proving actual monetary loss or posting security. This right is in addition to, and not in substitution of, any other remedies available to the Employer. The right to seek urgent interdictory relief cannot be excluded by the choice of any alternative dispute forum.
15.
CONSIDERATION AND ACKNOWLEDGEMENTS
The Employee acknowledges that: (a) this Agreement is entered into freely and voluntarily; (b) the Employee has had the opportunity to obtain independent legal advice; (c) the restraint obligations are reasonable in all the circumstances and are supported by adequate consideration, including the offer of employment, continued employment, access to Confidential Information and client relationships, paid garden leave, monthly Restraint Payments during the Restraint Period, and the remuneration and benefits received; (d) the Employer has a legitimate proprietary interest in the protection of its business; (e) the Employee has the skill and ability to find alternative employment that does not breach this Agreement; and (f) the Employee is aware that, under Backsports v Motlhanke (Labour Appeal Court, October 2025), the reason for the termination of employment does not affect the enforceability of this restraint.
16.
SEVERABILITY AND BLUE-PENCIL DOCTRINE
If any provision of this Agreement, or any part of any provision, is found by a court to be unenforceable in any respect (including duration, geographic area, or scope of restricted activities), the parties expressly agree that the court shall read down the offending provision to the maximum extent that is reasonable and enforceable, while preserving the balance of the Agreement. This express invocation of the blue-pencil doctrine reflects the parties' intention that the restraint be enforced to the fullest extent permitted, rather than struck out entirely.
17.
GOVERNING LAW AND JURISDICTION
This Agreement is governed by the laws of the Republic of South Africa. The parties irrevocably submit to the non-exclusive jurisdiction of the High Court of South Africa, Gauteng Division, Johannesburg for the resolution of any dispute (including any application for urgent interdictory relief).
18.
ELECTRONIC EXECUTION
This Agreement may be signed electronically. Electronic signatures are valid and enforceable under sections 11 and 13 of the Electronic Communications and Transactions Act 25 of 2002 (ECT Act). Where an advanced electronic signature is used, it shall be presumed to be valid in terms of section 13(4) of the ECT Act unless the contrary is proved.
19.
GENERAL PROVISIONS
Entire Agreement: This Agreement constitutes the entire agreement between the parties on its subject matter and supersedes all prior oral or written understandings regarding the restraint.
Amendment: No amendment is binding unless in writing and signed by both parties.
Severability: If any provision is found invalid, it shall be severed or read down (see Severability clause if Expert); the remaining provisions shall continue in full force.
Waiver: No failure to enforce any right shall constitute a waiver.
Counterparts: This Agreement may be signed in counterparts, each of which constitutes an original.
Survival: The confidentiality and restraint obligations shall survive termination or expiry of this Agreement for the full period specified.
Amendment: No amendment is binding unless in writing and signed by both parties.
Severability: If any provision is found invalid, it shall be severed or read down (see Severability clause if Expert); the remaining provisions shall continue in full force.
Waiver: No failure to enforce any right shall constitute a waiver.
Counterparts: This Agreement may be signed in counterparts, each of which constitutes an original.
Survival: The confidentiality and restraint obligations shall survive termination or expiry of this Agreement for the full period specified.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date indicated.
EMPLOYER
Thabo Nkosi
Human Resources Director
Meridian Group (Pty) Ltd
Date: ____________________
EMPLOYEE / RESTRAINED PARTY
Ayanda Dlamini
Senior Sales Manager
Date: ____________________
Available as a print-ready PDF or an editable Microsoft Word (.docx) file.
What Is a Non-Compete Agreement?
A non-compete agreement, also known as a restraint of trade agreement, is a contract in which one party agrees not to compete with another party in a defined geographic area and for a defined period after their business relationship ends. It is commonly used in South Africa to protect employers when key employees leave, to protect business sellers from competition by the seller after a business sale, and to protect parties to a partnership or joint venture from a departing partner immediately competing against the shared business.
South African law takes a nuanced approach to the enforcement of restraints of trade. The Supreme Court of Appeal's landmark judgment in Magna Alloys and Research SA (Pty) Ltd v Ellis 1984 (4) SA 874 (A) settled that restraints of trade are prima facie valid and enforceable in South Africa. Unlike some jurisdictions, South African courts do not automatically regard restraints as contrary to public policy — the party seeking to escape the restraint bears the onus of showing that enforcement would be unreasonable and against public policy. Reasonableness is assessed by weighing the business interest being protected against the harm to the restrained party.
South African courts consider factors including the geographic scope, the duration, the nature of the business being protected, and whether the restrained party had access to confidential information or trade connections. Courts in South Africa will sever and enforce a partially reasonable restraint rather than strike down the whole clause. Non-compete agreements in South Africa should be carefully tailored to the specific business interest being protected — broad, blanket restrictions are more likely to be found unenforceable. POPIA 4 of 2013 may also be relevant where personal information of clients or contacts is sought to be protected.
What's Covered in This Template
Our South African non-compete agreement template is structured to maximise enforceability while protecting legitimate business interests.
Party Identification
Legal names, identity or registration numbers, and addresses of the party granting the restraint and the beneficiary.
Confidential Information Definition
Precise definition of the confidential information and trade connections the restraint is designed to protect.
Scope of Restricted Activity
Description of the specific activities, industry segments, or business types the restrained party may not engage in.
Geographic Limitation
The geographic area within which the restriction applies — for example, a province, city, or defined radius.
Duration of Restraint
The period for which the restraint applies after termination of the relationship, typically 6 months to 2 years in South Africa.
Non-Solicitation of Clients
Restriction on the restrained party soliciting or dealing with former clients of the business within the restraint period.
Non-Solicitation of Employees
Restriction on poaching or inducing employees of the protected party to leave during the restraint period.
Consideration for the Restraint
Statement of the business value, compensation, or other consideration provided in exchange for the restraint.
Garden Leave Provision
Optional clause requiring the restrained party to serve a garden leave period on full pay before the restraint period begins.
Severability Clause
Provision allowing a South African court to sever and enforce any part of the restraint that is reasonable.
Remedies for Breach
Right to seek an urgent interdict before the High Court of South Africa and to claim damages for breach.
Governing Law
South African law governs the agreement with disputes referred to the appropriate South African court.
How to Create a Non-Compete Agreement in South Africa
Follow these steps to produce an enforceable South African non-compete agreement.
- 1
Identify the Parties and Relationship
Record the parties' legal names and the nature of the relationship giving rise to the restraint — employment, sale of business, or partnership.
- 2
Define the Protected Interest
Clearly identify the confidential information, trade connections, or goodwill the restraint is designed to protect.
- 3
Set Reasonable Scope and Duration
Specify a geographic area and duration that are proportionate to the business interest — South African courts scrutinise broad restraints.
- 4
Include Non-Solicitation Clauses
Add client and employee non-solicitation provisions to provide comprehensive protection for your South African business.
- 5
Review and Download
Review the agreement for proportionality and South African legal compliance, then download the PDF for signature.
Why Doxuno documents are different
Four things that make our templates more thorough than AI-generated drafts and more current than static template libraries.
Always current
Always current with the law
Templates carrying statute references are continuously updated as the law changes. Your document always reflects the current legal framework.
Free PDF
Print-ready PDF
Free to download. Vector text, embedded fonts, statute citations baked in. Print, sign, file. Ready for any signing flow including electronic signature.
Word · .docx
Editable Word (.docx)
Continue editing in Word after download. Add custom clauses, reuse the template for similar agreements, or share with a colleague for collaborative review.
Requires Expert one-time unlock or any paid Doxuno subscription.
Legal Considerations
South African courts enforce restraints of trade that protect a legitimate interest and are not unreasonably broad.
This template is for informational purposes only and does not constitute legal advice. Consult a qualified South African attorney for advice specific to your situation.
Reviewed for South African law
The Magna Alloys Enforceability Test
Since Magna Alloys and Research SA (Pty) Ltd v Ellis 1984 (4) SA 874 (A), South African courts presume restraints of trade to be valid and enforceable. The restrained party bears the onus of proving that enforcement would be unreasonable and contrary to public policy. Reasonableness is assessed by weighing the legitimate business interest against the harm to the restrained party's freedom to earn a living. South African courts will sever an unreasonable portion and enforce the remainder where possible.
What Constitutes a Legitimate Business Interest
South African courts have recognised trade connections (client relationships), confidential information, and business goodwill as legitimate protectable interests. A restraint that goes beyond protecting one of these interests — for example, one that simply prevents competition without any confidential information or trade connections at stake — is more likely to be refused enforcement. Employers protecting key employees' client relationships and confidential technical knowledge are in the strongest position in South African court proceedings.
Urgent Interdict Applications
When a restraint is breached in South Africa, the aggrieved party may apply on urgency to the High Court for an interdict restraining the breach pending a full trial. South African courts apply the test in Setlogelo v Setlogelo 1914 AD 221: the applicant must show a clear right, injury actually committed or reasonably apprehended, and the absence of a comparable remedy in damages. Interdict applications in restraint of trade cases are common in South Africa and may be decided within days of filing.
Frequently Asked Questions
Create Your South African Non-Compete Agreement Now
Protect your business interests with an enforceable non-compete agreement tailored for South Africa. Download your PDF in minutes.
Free PDF · Editable Word with Expert · No account required