Andy Burnham’s proposal to restrict non-competes may sound pro-business, but as John Hayes explains, it risks overlooking how employers protect investment, confidential information and valuable commercial relationships.
“Burnham vows to end non-compete clauses” announced the Financial Times recently, reviving a familiar political argument: that restricting non-compete clauses will encourage innovation by making it easier for employees to move between businesses.
It is not the first time a government has considered this approach. Rishi Sunak’s administration explored a ban in 2023, and Keir Starmer’s government also consulted on options for reform.
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The principle sounds attractive. Greater employee mobility should encourage the exchange of ideas and help innovative businesses grow.
But the relationship between employment restrictions and innovation is more complicated than this suggests.
I declare an interest: I specialise in enforcing and defending restrictive covenants, including non-compete clauses, and have been involved in around eight to 10 injunction proceedings over the past year.
From that experience, I believe a ban would do little to address the underlying challenges facing UK businesses. Why?
Firstly, because the proposal to ban non-competes feels slightly...
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