The future of non-compete clauses

Mark McKeating, Partner

A non-compete is a contractual term preventing an employee from working for a competitor.

Non-competes are designed to protect an employer’s confidential information, trade secrets and customer relationships.

Arguably, it is the most onerous restriction that can be placed on an employee. Courts will only enforce a restraint on trade provision if it goes no further than is necessary to protect the employer’s proprietary interests.

Examples where provisions may be wider than is necessary to protect proprietary interests include lengthy periods of restraint (18 – 24 months), wide geographical limitations or preventing an employee carrying out any work for a competitor. Regardless of the enforceability issues, there is a school of thought that the mere presence of a non-compete in a contract can deter an employee from moving jobs.

Previous analysis has suggested that non-competes are widely used in the labour market. Around 5 million workers in the UK are subject to a non-compete in a contract. The average length of restraint placed on an employee is 6 months.

Previous proposals for reform of non-competes

The Conservative government in 2020 and 2023 considered banning non-competes or capping the restraint period to 3 months. This was part of the government’s aim to encourage entrepreneurship and grow the economy. The changes were never implemented prior to the 2024 election.

The current government’s proposal

A recent consultation has been launched to reform non-compete clauses. The aim is to boost the labour market, promote innovation, and protect workers from restrictive terms which may hinder movement in the job market. Supporting start businesses is given a special mention.

Some of the current ideas for reform include:

• Introducing statutory limits of between 1 to 12 months on the length of restraints;
• A complete ban;
• Applying thresholds on the restraint periods depending on the size of a business. For example, a 3 month cap for businesses with fewer than 250 employees, and a longer period of restraint for larger companies;
• Salary thresholds so that junior employees are not subjected to the same level of restrictions as senior staff.

The consultation is open until 18 February 2026. 

Our team regularly advise businesses and individuals on the enforceability of non-competes in employment contracts. We will be contributing to the consultation.

You can read a copy of the consultation working paper at Working paper on options for reform of non-compete clauses in employment contracts – GOV.UK .

If you require any advice on restrictive covenants, please feel free to contact the Kuits employment team on 0161 832 3434 or mark.mckeating@kuits.com.