The UK Government is currently reviewing the use of non-compete clauses, a common feature of employment contracts, designed to restrict employees from working for competitors for a period after leaving their role.
Recent proposals suggest these restrictions could be limited to a maximum of three months or potentially removed altogether. While the reforms are still under discussion, they have sparked debate among lawyers, employers, and industry bodies about how best to balance business protection with employee freedom.
What are non-compete clauses?
A non-compete clause is a contractual restriction that prevents an employee from working for a competing business - or starting one of their own – both during the employees’ employment and for a set period after leaving employment.
These clauses are typically used to protect an employer’s legitimate business interests, such as:
Non-compete clauses are usually seen in senior roles or positions where employees have access to sensitive information.
However, they are only enforceable if they are reasonable in scope, duration and geographic reach.
The legal history of non-compete clauses
In the UK, restrictive covenants, including non-compete clauses - have long been governed by common law principles.
Historically, courts have taken the view that restrictions on someone’s ability to work are contrary to public policy, unless they are necessary to protect legitimate business interests.
This means that employers cannot impose blanket restrictions simply to prevent competition. The clause must be carefully drafted and proportionate.
If a restriction goes further than necessary, the courts are likely to deem it unenforceable.
Over time, this approach has created a situation where courts assess each case individually, weighing up the employer’s need for protection against the employee’s right to earn a living.
Why is the government reviewing them?
The Government’s review reflects concerns that non-compete clauses may be limiting labour mobility and innovation, particularly in sectors where talent moves frequently between businesses.
One proposal under consideration is to cap non-compete clauses at three months, ensuring employees are not prevented from working in their field for extended periods.
Another, more radical possibility would be to prohibit non-compete clauses entirely, leaving employers to rely on other contractual protections such as confidentiality obligations or non-solicitation clauses.
Concerns from legal and business communities
The proposed reforms have been met with caution from employment lawyers and industry groups.
The Employment Lawyers Association (ELA) has suggested the current system already strikes a reasonable balance between protecting businesses and allowing employees to move freely between roles.
Some have also warned that restricting non-compete clauses could lead employers to rely more heavily on longer notice periods and garden leave - where employees remain employed and paid but are not permitted to work or join a competitor.
In practice, this could mean employees are kept out of the market for longer, rather than less time.
There are also concerns about potential costs for businesses, particularly where companies may feel they need to invest more in protecting commercially sensitive information.
Certain sectors, including financial services, have expressed concern that major changes could affect the UK’s competitiveness in global markets.
What could happen next?
At this stage, no formal legislation has been introduced. The Government is still considering feedback from legal experts, businesses, and industry groups.
If reforms are implemented, they could lead to significant changes in how employment contracts are drafted and enforced across many sectors.
Employers may need to rethink how they protect their commercial interests, while employees could gain greater flexibility when moving between roles.
However, as with all Government reviews and consultations, it remains to be seen how this is all decided, especially in view of the number of Government u turns with previous proposals.
How Coles Miller can help
Changes to the law surrounding non-compete clauses could have significant implications for both employers and employees. Whether you are drafting new contracts, reviewing existing restrictions or dealing with a dispute, specialist legal advice can help ensure your position is protected.
Our experienced employment law team supports both businesses and individuals with clear, practical advice that is individually tailored to your circumstances.
For employers:
Restrictive covenants are an important tool for protecting business interests, but they must be carefully drafted to be enforceable. Our team can help employers ensure that employment contracts strike the right balance between protecting the business and complying with current legal standards.
We regularly assist businesses with:
We also support employers in updating contracts and policies if legislative changes come into force, ensuring businesses remain compliant while maintaining effective safeguards.
For employees:
If you are leaving a role and have been asked to comply with a restrictive covenant, it can be unclear what you are legally allowed to do next.
Our employment lawyers can advise on:
In many cases, restrictions may be broader than the law allows, and early advice can help avoid costly disputes or unnecessary delays in starting a new role.
Our practical, balanced advice
Non-compete clauses sit in the middle of two important legal principles: protecting legitimate business interests - and safeguarding an individual’s right to work.
Our team provides proactive, sensible, and commercially focused advice, helping clients reach this balance and resolve issues efficiently.
If you would like advice on restrictive covenants, employment contracts or workplace disputes, the Coles Miller Employment Law team would be happy to assist.
Coles Miller employment solicitor Hugh Reid is available for specialist legal advice on employment contracts, disciplinary procedures, terminating contracts of employment and making workers and employees redundant. He is based at our Poole (Parkstone Rd) office.