In this alert, we've highlighted some of the key developments in UK employment law and explain what they may mean for employers.

Limits on noncompetition restrictions

The UK government has announced its intention to limit the duration of noncompete post-termination restrictions in employment contracts to a maximum of three months. Noncompete covenants are designed to provide business protection to an employer by seeking to restrict a former employee from undertaking employment with a rival competitor for a defined period following the termination of their employment. Noncompetition covenants are common in employment contracts with senior or key employees, and they have been upheld by the courts for durations of up to 12 months. The government's intended statutory cap will impose a limit of three months.

At present, there are no details about when the statutory cap will be introduced or how it will work, but we will keep a close eye on developments.

The government is not proposing to reform an employer's ability to use paid notice periods, gardening leave, or other forms of post-termination restrictions (such as nonsolicitation or non-dealing covenants), so there will remain a range of options for employers to protect their business. Similarly, the statutory cap on noncompetes only will apply in the employment context and not, for example, to shareholder agreements.

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