The government has formally reopened the debate on non-compete clauses, publishing a working paper that invites views on whether (and how) these restrictions should be reformed in the UK.
While non-competes have long sat within the realm of employment law, the renewed focus reflects a broader concern about market flexibility, competition and innovation. With an estimated five million UK workers subject to a non-compete clause, often lasting around six months, the government is increasingly concerned that these provisions may be doing more harm than good.
Why are non-competes under scrutiny?
Non-compete clauses restrict an individual from working for a competing business, or setting one up, for a period after their employment ends. In principle, they can serve a legitimate purpose, particularly where an employee has access to sensitive information, key clients or strategic know-how.
However, the government’s concern is twofold. Firstly, non-competes are far more widespread than many assume and are not limited to senior or highly paid roles. Secondly, even where a clause may ultimately be unenforceable, its mere presence can deter employees from changing jobs, negotiating better terms, or starting new ventures, particularly where the cost and risk of legal action looms large.
This has knock-on effects for wage growth and competition, and ties in closely with the Competition and Markets Authority’s increasing focus on anti-competitive practices in labour markets.
What reforms are being considered?
The working paper does not propose a single solution. Instead, it sets out a range of options and asks businesses, workers and advisers to comment on their potential impact. These include:
• A statutory time limit on non-compete clauses (potentially shorter or longer than the previously proposed three-month cap).
• Different limits based on employer size, for example shorter restrictions for SMEs and longer ones for larger organisations.
• An outright ban on non-compete clauses in employment contracts.
• A ban below a salary threshold, protecting lower-paid workers while preserving non-competes for higher earners.
• A hybrid approach, combining a salary threshold with a capped duration for those above it.
The government is also asking whether any reform should be confined to non-competes alone, or whether other restrictive covenants, such as non-dealing or non-solicitation clauses, should be brought into scope to prevent employers simply re-labelling restrictions.
In addition, consideration is being given to whether reforms should apply only to employment contracts, or extend to wider workplace arrangements such as LLP agreements, shareholder agreements and incentive plans.
Enforcement and access to justice
Another key issue is enforcement. At present, disputes over non-compete clauses are typically resolved in the High Court, with significant cost risks for both sides. The government is exploring whether this acts as a deterrent to workers who might otherwise challenge overly restrictive provisions, and whether alternative approaches could improve access to justice.
The international picture
The UK is far from alone in revisiting non-competes. Other jurisdictions have already taken steps to curb their use, including mandatory compensation during restricted periods, bans below certain salary levels, or outright prohibitions in some cases. The government is clearly alive to these models and how they may influence reform at home.
What should employers do now?
There is no immediate change to the law. The consultation closes on 18 February 2026, and no implementation timetable has been set. That said, reform of non-compete clauses has cross-party momentum, and some form of legislative change now feels more a question of “when” than “if”.
In the meantime, employers would be well advised to:
• Review existing restrictive covenants to ensure they remain proportionate and defensible.
• Avoid a “one size fits all” approach to non-competes.
• Consider whether less restrictive measures would adequately protect legitimate business interests.
• Engage with the consultation process to help shape the future framework.
This is a rare opportunity for businesses and individuals to influence policy at an early stage. Businesses can provide their feedback on the paper at by clicking here.
Join Steve's debate on LinkedIn by clicking here.
If you are a company or individual that is impacted by the changes to the laws around non-compete clauses, please contact BPE's Employment team by clicking here.
