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New consultation on use of non-competes in the UK
New consultation on use of non-competes in the UK
24 July 2025
Series
Blogs
24 July 2025
The government has recently announced that it will publish a new consultation on the use of non-compete clauses in UK employment contracts and consider options for reform.
This follows the previous government’s announcement in May 2023 that it would legislate to limit the length of non-compete clauses to three months in a bid to boost competition and innovation and to give employees greater freedom to change jobs – a move which followed similar proposals at the time happening in the US and other jurisdictions.
The previous government’s commitment to overhaul the use of non-competes in employment contracts in the UK never materialised, despite the magnitude of the government’s proposals which left a series unanswered questions for employers to grapple with (read more about the previous proposals here) and the prevalence of non-competes being highlighted in a report by the Competition and Markets Authority in 2024 (read more about this here).
In response to a debate about the use of AI in employment as part of the House of Lords debate on the Employment Rights Bill on 21 July 2025, government minister Baroness Jones confirmed that the government will be consulting on options for reform of non-compete clauses in employment contracts in “due course”.
Baroness Jones referred to the “extensive research and analysis in recent years looking at the prevalence of non-compete clauses in the UK” and government research from 2023 which “found that non-compete clauses were widely used across the labour market…with a typical duration of around six months” and noted that while non-competes are more common in higher-paid jobs, even in lower-paid jobs they were widespread. It was further acknowledged that such clauses can “adversely impact both the worker affected, through limiting their ability to move between jobs, and the wider economy, due to the impacts on competition”.
The government’s intention to publish a consultation is news to us. We are not aware of the government having previously signalled an intention to do so and many business leaders, academics and practitioners had assumed the previous government’s research, consultation and subsequent proposals to overhaul non-competes had quietly died a death. Whilst we now know that a consultation and potential reform is on the horizon, we have not been provided with any detail of when this will take place or what options for reform might look like, or if they will reflect the previous government’s intentions to limit non-competes to three months.
For now, employers are back to being in a ‘watch-this-space’ period. But as a reminder, this is an area which the previous government revisited on a number of occasions, and consultations and any legislative reform, as we know with the ongoing Employment Rights Bill, takes time.
In the meantime, you can access more information, commentary and resources on the use of non-competes and other post-termination restraints of trade in our dedicated thought leadership page: Team Moves: Poached and Poacher.
If you have any queries about this topic, please contact us.
Read more:
Non-compete clauses under the competition regulator’s spotlight
HR issues in antitrust – competing or cheating?
Reform of non-compete clauses – the knowns and the unknowns
Team Moves: Poached and Poacher