The UK Department for Business and Trade (“DBT”) has published a working paper setting out potential reforms to the use of non-compete clauses in employment contracts. We look at what employers need to know.
Published on 26 November 2025, the paper marks a renewed push by the Government to address concerns that non-compete clauses may be restricting labour market mobility and competition.
Following a decade of intermittent consultation, the Government is surpassing the previously planned statutory cap of three-months on non-compete clauses. Instead, it is widening the scope and consulting on more wide-ranging comprehensive options, which are explored in more detail below.
The DBT is also seeking feedback on whether reforms should extend to other forms of restrictive covenants and wider workplace contractual arrangements. Responses to the consultation are required by 18 February 2026.
Non-compete clauses are inserted into employment contracts to restrict an employee’s ability to work for, or establish, a competing business after they have left their employment. The current starting point under the law of England and Wales is that a non-compete clause, as with any clause in restraint of trade, is unenforceable, unless the employer can demonstrate:
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