The Competition and Markets Authority (CMA) has increased its focus on how businesses compete for talent, as discussed in our recent GT Alert, “Talent Wars: How Competition Laws Apply to UK Recruitment.” Against this backdrop, on 26 November 2025, the UK government published a working paper inviting views on potential reforms to noncompete clauses in employment contracts. Responses are due by 18 February 2026.
This working paper forms part of the government’s broader agenda to improve labour market dynamism, strengthen competition for talent, and support start-ups and scale-ups. It seeks evidence on whether the widespread use of noncompete clauses restricts mobility, suppresses wages, reduces knowledge diffusion, and constrains the creation of new businesses, particularly for lower-paid workers, who may be deterred from challenging unenforceable clauses.
This GT Alert summarises the current legal framework for noncompete clauses, the UK government’s options for reform, and the potential implications for employers.
Current Legal Framework
Noncompete clauses restrict a worker’s ability to join or establish a competing business after leaving employment. Under English law, such clauses are unenforceable unless they go no further than reasonably necessary to protect a company’s legitimate business interests. Despite this, their use remains commonplace, with around five million workers across a broad range of sectors currently subject to such clauses.
Whilst employers often...
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