Back
Get in Touch Menu

Government proposes to limit the length of non-compete clauses

27 July 2023

The government plans to introduce legislation that will place a three month limit on the length of non-compete clauses. This was announced on 10 May as part of a wider package of employment law regulatory reform.

The government hopes the proposed change will mean greater flexibility for up to five million UK workers who would be allowed to switch jobs, join a competitor or start their own business within a shorter time frame, while simultaneously widening the talent pool. The proposals came shortly after the US Federal Trade Commission announced its plan to ban non-compete clauses altogether at a federal level. This signals that we may be on the brink of a global shift away from these types of clauses.

What employers should know about the anticipated changes:

  • the three month limit would only apply to non-compete clauses
  • this would not affect non-solicitation or non-dealing clauses
  • it would not prevent employers from restricting their employees’ activities during any (paid) notice period or garden leave
  • there would be no impact on confidentiality clauses
  • the changes should not extend to LLP agreements or LLP members and the statutory limit would not affect non-competes in wider workplace contracts, such as equity arrangements, partnership agreements or shareholder agreements.

It is also worth mentioning that the government stated that such legislation will be introduced “when parliamentary time allows” – when that will be is anyone’s guess.

For now, non-compete clauses of over three months remain enforceable, provided they are no wider than reasonably necessary to protect the employer’s legitimate interest. However, it remains unclear when – and indeed, if – such legislation will be put forward, so watch this space.

If you have any questions regarding these proposed changes, please don’t hesitate to contact us.

Contact us

Our Legal 500-rated employment law team are experts in guiding businesses of all sizes and backgrounds through a range of issues that may arise.

Disclaimer: All legal information is correct at the time of publication but please be aware that laws may change over time. This article contains general legal information but should not be relied upon as legal advice. Please seek professional legal advice about your specific situation - contact us; we’d be delighted to help.
Contact
Jenny Hawrot LLB (Hons)
Partner
View profile
Related services
Share this article
Resources to help

Related articles

Employment Rights Bill: Bereavement, paternity & unpaid parental leave - what do businesses need to know?

Employment & business immigration

Changes to bereavement, paternity and unpaid parental leave are on their way as part of the Employment Rights Bill, so it’s important your business knows what’s on the horizon to…

Simon Pathé FCILEx
Partner, chartered legal executive

Employment Rights Bill: Employees to benefit from guaranteed hours & rights relating to shifts

Employment & business immigration

The Employment Rights Bill is shaking things up, with employees expected to benefit from guaranteed hours and rights relating to shifts. The government is committed to ending one-sided flexibility and…

Simon Pathé FCILEx
Partner, chartered legal executive

Supreme Court makes landmark decision on the definition of ‘woman’ and ‘sex’ in the Equality Act

Employment & business immigration

The Supreme Court has unanimously allowed the appeal for For Women Scotland Limited and has provided clarity on how ‘woman’, ‘man’ and ‘sex’ are to be defined. The decision acts…

Hifsa O'Kelly LLB (Hons)
Senior associate, solicitor
Contact us