The Government has reopened the debate on non-compete clauses, publishing a working paper on 26th November 2025 outlining potential reforms that seek to provide “millions of UK workers greater freedom to switch jobs”. The discussion around reform is longstanding, and the Government seems intent on making changes to drive economic growth (see below).
While this may benefit those hiring, it creates significant challenges for employers concerned about employees with critical client relationships and sensitive information moving directly to a competitor. So, what can employers do now to stay ahead?
Are non-competes enforceable?
Many employers assume non-competes are rarely enforceable—but in reality, well-drafted restrictive covenants are upheld by the courts, particularly where they protect client relationships, confidential information, or team stability.
With reform on the horizon, now is the time for employers and HR teams to understand what may change, and why these clauses remain vital for safeguarding your competitive edge.
Why this matters
Non-compete clauses are a cornerstone of many businesses’ protection strategies and play a vital role in protecting a business’s competitive edge. When drafted properly, they can:
- Safeguard valuable client and customer relationships
- Protect confidential information and commercially sensitive data
- Reduce the risk of destabilising team moves
- Support business continuity during senior departures
The Employment Team has extensive experience advising on all aspects of restrictive covenants and non-compete clause: drafting enforceable clauses, obtaining and resisting injunctions, and managing complex team move disputes. Acting for both employers (seeking to enforce) and departing employees and new employers (seeking to defend) gives us great insight into the legal and commercial application of these clauses in practice.
The Government’s concerns
The working paper highlights concerns that non-compete clauses may:
- Restrict employee mobility and wage progression
- Limit innovation and entrepreneurship
- Influence behaviour even when unenforceable (the “chilling effect”)
Reform: Options under consideration
The consultation seeks views on:
- Statutory time limits (three months suggested, with shorter or longer periods under review)
- Different limits by employer size (e.g., three months for larger businesses, six months for smaller employers)
- Complete prohibition of non-compete clauses
- Salary thresholds, preventing non-competes for lower-paid workers
- Combined approach, such as a salary threshold plus a three-month cap
The Government is also considering whether reforms should extend to other restrictive covenants (e.g., non-solicitation or non-poaching) and whether legal costs deter employees from challenging clauses.
What happens next?
The consultation closes on 18th February 2026. After reviewing responses, the Government will decide which proposals to pursue. No implementation date has been confirmed.
What should employers do now?
Continue to include non-compete clauses where appropriate, ensuring they are:
- Tailored to the role
- Reasonable in scope and duration
- Limited to what is necessary to protect legitimate business interests
With the Government looking to provide “millions of UK workers greater freedom to switch jobs, start new businesses and apply their skills to the greatest effect”, employers should also strengthen other protections, such as non-dealing and non-solicitation restrictions, confidentiality provisions and garden leave clauses, to safeguard their position if reforms take effect.
Employers should also consider remuneration structures that might incentivise loyalty and dissuade a harmful move to a competitor (having both ‘carrots’ and ‘sticks’). Again, a careful balance needs to be struck to avoid such structures being deemed unreasonable and therefore void.
How we can help
We regularly help clients prepare and enforce restrictive covenants, defend against claims, and navigate team move disputes. Please feel free to contact the team if you would like to discuss:
- Reviewing your current contracts
- Understanding how these proposed reforms could impact your business
- Putting in place robust protections for your client relationships and confidential information
This is only intended to be a summary and not specific legal advice. Should you require assistance, please contact a member of our team.
