The Department for Business and Trade last week published a working paper on options for reform of non-compete clauses in employment contracts. The consultation, open until 18 February 2026, seeks views on a range of reforms to non-compete clauses, including a cap on duration, salary thresholds or an outright ban. These proposals reflect the Government's intention, like its predecessor, to limit the use of non-competes in employment relationships, in order to reduce barriers to job mobility and foster innovation.
Currently, the use of non-compete clauses in employment situations is governed by common law principles; there is no statutory framework regulating their use. A non-compete will only be enforceable if it is reasonable in scope, duration, and, to a lesser extent, geographical reach. It must also be necessary to protect a legitimate business interest, such as confidential information, client connections or workforce stability. Courts assess reasonableness on a case-by-case basis, and any restriction that goes beyond what is necessary will be struck down.
The Government estimates that around 5 million employees in Great Britain are subject to a non-compete – purportedly more than in the US or Europe. The typical duration is around six months, although 12 months is not uncommon for senior executives.
This is not the first time that UK non-competes have come under scrutiny. In 2023, the then government announced its...
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