Is time up for non-competes in employment contracts?

The Government has today launched a new working paper on whether to ban or restrict the use of non-compete clauses.  This reflects concerns that these restrict employees' ability to work for, or set up, a rival business after they have left an employer and this impacts the Government's ‘growth mission’.  

Non-competes are currently only enforceable if they go as far as (and no further than) reasonable and necessary to protect an employer's goodwill and confidential information. Proposals under consideration in the paper are:

• an outright ban on non-competes;
• a ban for those employees below a minimum salary threshold;
• limits on the length of non-compete provisions (which may depend on company size); and
• reform of the costs rules applicable in injunction cases concerning non-compete clauses.

The closing date for responses is 18th February 2026.

Restricting the use of non-competes has been on the agenda for many years  - the previous Government also consulted on banning or limiting them.  But reform carries the risk of unintended consequences: many employers will opt for longer notice periods instead, with the option to put the employee on garden leave, doing little to promote growth. 

With restrictions on non-competes increasingly likely, employers can take steps now to protect themselves - review their contracts of employment and ensure that these have appropriate, well drafted non-solicitation, non-dealing and confidentiality clauses. They should also focus on measures to protect their business interests, such as tight controls over confidential information and strict rules on use of personal devices for handling client communications.