UK: government seeks views on reform of non-compete clauses

The Government has published a working paper inviting views on options for the reform of non-compete clauses in employment contracts, with responses sought by 18 February 2026.  This follows an earlier consultation by the previous government, which led to a proposal to impose a statutory cap of three months, but alternative options are now being considered with no preference suggested.  The options on which input is sought are:

• a statutory limit on the length of non-competes, either applicable to all or differing according to company size (for example, three months for larger employers and six months for smaller ones, with the suggested dividing line either at 250 or 50 employees);  the duration of non-competes within the cap would still need to be reasonably necessary to be enforceable;
• a ban on non-compete clauses, either altogether or for employees below a salary threshold
• a combination of the above, with non-competes banned for those earning less than a salary threshold and capped at three months for higher earners.   

The government is not considering the option of requiring payment during the period of non-competes.  

The working paper also asks whether any restrictions should apply to other types of restrictive covenants and to 'wider workplace contracts', and, if the cost of litigating covenant disputes in the High Court is an obstacle, how this could be addressed.   

Employers may want to submit their views and should keep an eye out for further developments.