At a glance
- The government has published a working paper seeking views on reforming non-compete clauses in employment contracts.
- Proposed options include a statutory time limit, a complete ban, salary-based restrictions, or a combination of these measures.
- Feedback is also sought on whether reforms should extend to other restrictive covenants and wider workplace contracts.
- The consultation considers the impact of legal costs on enforcing restrictive covenants.
Responses to the working paper are due by 18 February 2026.
The government has issued a working paper seeking views on options to reform non-compete clauses in employment contracts, with the aim of boosting labour market dynamism, supporting innovation, reducing barriers to recruitment and protecting workers.
The options considered are:
- Statutory limit on length (for example, three months, possibly varying by company size).
- Complete ban on non-compete clauses.
- Ban below a salary threshold (protecting lower-paid workers).
- Combination of salary threshold ban and a statutory time limit for those who earn above the threshold.
The government is also seeking views on:
- Whether restrictions should be limited to non-compete clauses only or should also apply to other restrictive covenants.
- How the government can ensure that other restrictive covenants, for example non-dealing clauses, are not used in a way that would have a similar effect as a non-compete clause, if restrictions were limited to non-compete clauses only.
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