Co-authored by Sonal Sejpal, Tabitha Joy Raore, and
Milly Mbedi of Anjarwalla & Khanna
Employers had a difficult time enforcing restrictive trade
clauses (RTCs) during 2017. While the Employment and Labour
Relations Court has held that RTCs are constitutional and generally
enforceable if reasonable, they need to be balanced against the
employee's circumstances, and it is the latter that has
prevailed in recent cases.
RTCs must comply with the Contracts in Restraint of Trade Act
(Chapter 24, Laws of Kenya)(CRTA), to stand any chance of
enforcement. This requires that RTCs are sufficiently limited as to
time, scope, and geographical coverage and are reasonable.
This needs to be balanced against an employee's right to
employment that has—in recent cases—been prioritized
over the employer's right to protect its business interests. A
key example is Credit Reference Bureau Holdings Ltd v
Kunyiha, decided in 2017, which left many questioning the
effectiveness of an RTC.
