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The UK Government has launched a consultation seeking views on potential reforms to non-compete clauses in employment contracts, signalling possible significant changes to the way post-termination restrictions are regulated in Great Britain.
A working paper published by the Government invites responses from employers, employees and professional advisers on a range of policy options designed to increase labour market mobility and encourage innovation.
Why Are Non-Compete Clauses Under Review?
Government analysis suggests that approximately five million employees in Great Britain are currently subject to non-compete clauses, with a typical restriction lasting around six months.
The Government considers that non-compete clauses may:
- restrict employee movement;
- limit the spread of skills and knowledge between businesses;
- undermine incentives for innovation; and
- create barriers for start-ups and growing businesses seeking access to talent.
The working paper indicates that reform could help liberalise the labour market, strengthen competition, and give workers greater freedom to change jobs or establish new businesses.
Proposed Policy Options
The Government is seeking feedback on several alternative approaches, including:
- introducing statutory limits on the maximum length of non-compete clauses;
- banning non-compete clauses entirely in employment contracts;
- prohibiting non-compete clauses below a specified salary threshold; or
- a combined approach, banning non-competes below a salary threshold while imposing a statutory cap above it.
No final decisions have been made, and the consultation is intended to gather evidence on the likely impact of each option.
Consultation Deadline
The working paper is available on the Government’s website. The deadline for responses is 18 February 2026.
Employers and employees alike may wish to engage with the consultation, given the potential implications for recruitment, retention, business protection and career mobility.
Q&A: What Employers and Employees Need to Know
What is a non-compete clause?
A non-compete clause restricts an employee from working for a competing business or starting a competing enterprise for a specified period after leaving employment.
Are non-compete clauses currently lawful in the UK?
Yes, provided they go no further than reasonably necessary to protect legitimate business interests, such as confidential information or client relationships.
Could non-compete clauses be banned altogether?
Yes. One of the options under consultation is a complete ban, although no decision has yet been taken.
What would a salary threshold mean?
A salary threshold could prevent employers from imposing non-compete clauses on lower-paid workers, while allowing them for senior or highly paid employees.
What should businesses do now?
Employers should review existing contracts, consider alternative protections such as confidentiality or non-solicitation clauses, and monitor developments closely.
Contact Us
Changes to the law on non-compete clauses could have far-reaching consequences for employers and employees alike. Our Employment Law solicitors advise businesses and individuals on drafting, enforcing and challenging restrictive covenants, as well as on workforce planning and compliance.
If you would like advice on how potential reforms may affect your contracts or business strategy, contact Willett & Co Solicitors today.