The government has announced plans to limit non-compete clauses in employment contracts. We look at what may be changing and what's still unclear.
In a speech on 9 October 2026, the Prime Minister, Andy Burnham, confirmed that the government intends to clamp down on non-compete clauses in employment contracts.
He didn’t provide details of the potential changes but observed that “some businesses have gone too far in their use of restrictive practices such as non-compete clauses”. The government is to propose legislation to address the concern that non-compete clauses (and related obligations) are a barrier to hiring for start-ups.
The announcement follows a recent letter sent to the government by founders of several tech start-ups in which it was argued that non-competes, along with long notice periods and enforced garden leave, were "undermin[ing] the innovation that drives economic growth".
In November 2025, former Prime Minister, Kier Starmer’s Labour government published a working paper alongside the Budget inviting views on options for reform of non-compete clauses.
Non-compete clauses are one type of “post-termination restraint” that an employer may agree with an employee and have the potential to prevent a departing employee from engaging in competitive activities for a defined period.
There is currently no statutory limit on the duration of a non-compete clause. Unlike some other jurisdictions, there is no salary...
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