Soundbite: Government consults on changes to non-compete clauses
The Government is currently consulting on options to reform non-compete clauses in employment contracts. Currently, many employers seek to prevent former employees from joining a competitor using a non-compete clause. Provided that these clauses go no further than necessary to protect the legitimate business interests of the former employer, they will be enforceable.
The Government has been concerned about the impact of these clauses on both individuals and growth. They have recently published a working paper on options to reform non-compete clauses. These options include:
- A statutory limit on the length of non-compete provisions
- A statutory limit linked to business size
- Restricting the use of non-compete provisions to high earners only (it will be interesting to see how this will work given the pay disparity between London and the regions)
- An outright ban on any form of non-compete
If you would like your say, a link to submitting responses and views is below, and responses must be submitted by 18 February.
Working paper on options for reform of non-compete clauses in employment contracts – GOV.UK
If you have any concerns about how non-compete restrictions work in your business or their enforceability, get in touch with a member of the team.