Reform of non-compete clauses still on government agenda
During the 21 July House of Lords debate on the Employment Rights Bill, Baroness Jones of Whitchurch confirmed that the government “will be consulting on options for reform of non-compete clauses in employment contracts in due course.” This indicates that reform in this area is still under consideration by the new government.
The previous government announced plans in 2023 to limit non-compete clauses in employment and worker contracts to three months. Those proposals related specifically to non-compete clauses in employment documentation and did not extend to other types of post-termination restriction such as non-solicitation or confidentiality clauses, or to restrictions contained in shareholder or partnership agreements. The proposals were not implemented before the change of government last year.
While it is too early for employers to take any action based on this debate, it is helpful to note that the topic remains on the legislative radar. In the meantime, employers may wish to ensure that other contractual protections, such as garden leave, confidentiality and non-solicitation clauses, are clearly drafted and appropriately tailored when making new appointments.
For more information or advice, please contact our Employment Law team.