Reform of non-compete clauses in employment contracts – Law Society response

The proposals

Non-compete clauses are inserted into employment contracts to restrict an individual’s ability to work for, or establish, a competing business after they have moved on from a job.

The UK government is interested in views on different options to reform non-compete clauses in employment contracts to support the growth mission.

The working paper is intended to support discussions, to determine whether and how to take proposals forward, as opposed to a formal consultation.

Our view

We recognise the UK government’s commitment to a dynamic labour market that enables people to seize employment opportunities and drive economic growth.

We also support efforts to boost mobility, innovation and new business creations.

Non-competes can limit mobility, but they also help protect confidential information and early-stage innovation, particularly for start-ups without strong intellectual property protections.

We support targeted, evidence-led reforms that curb misuse, especially in low-paid or unsuitable roles, while preserving legitimate business protections.

The common law framework continues to offer a balanced and flexible test when applied correctly.

Broad measures such as universal caps, employer-size thresholds or outright bans risk significant unintended consequences, including increased reliance on garden leave and restructuring of employment status to circumvent restrictions.

Reform should take a holistic approach, recognising that other restrictive covenants, such as non-dealing, non-solicitation and confidentiality clauses, can operate as functional substitutes and may render non-compete clauses both otiose and irrelevant.

Clear guidance, role-based justification requirements and improved transparency at the point of agreement are essential to prevent restrictive practices simply shifting elsewhere and to ensure workers fully understand the obligations they are signing.

Given the mixed and context-dependent evidence base, particularly from international comparisons, a more constructive approach would be for government to:

• commission deeper legal-economic research into how restrictive covenants operate in practice, and
• work with stakeholders on proportionate evidence-led reforms

Meaningful conclusions cannot be drawn without the kind of multidisciplinary analysis this area requires.

What this means for solicitors

If reforms to non-compete clauses are introduced, solicitors will need to:

• review existing contracts
• advise on compliance
• prepare for potential shifts toward alternative protections

Next steps

The working paper closed on 18 February 2026.

Read the full working paper on GOV.UK.