Reforming Non-competes In Employment Contracts

We reported in our blog of 29 December 2025 that the Government is looking into reforming non compete clauses in employment contracts. There is a strong suggestion that such clauses are a barrier to employment and protect employers to the detriment of workers. A working paper outlined options for reform. The working paper was open for responses until 18 February 2026.

The Competition and Markets Authority (CMA) has published its response. The CMA report examined the prevalence of non-competes and found that whilst mostly they relate to senior roles they are in fact common across all sectors and income levels. They advocate a balanced "combined" approach placing a ban on non-competes below a given salary threshold and a statutory limit on the length of the non- compete above the salary threshold.

The CMA's view is that non-competes are a "blunt tool" which can impact labour market mobility. The CMA accepts that in some cases they may serve a legitimate purpose but their view is that other more targeted mechanisms such as clawback provisions and garden leave may have a less severe impact on labour mobility. A restriction on duration of non-competes along (such as the suggested three months) would not be sufficient in their view, particularly for employees with a weaker negotiating position and those who cannot afford to withstand a period without pay in order to move jobs. They rule out a blanket ban on the basis that there are some persuasive arguments as to why more senior roles may require protection.

The CMA advises the Government on competition law. Its response is likely to carry some weight. The Employment Lawyers Association strongly supports reform for low-paid employees in sectors such as fast- food health and child-care, where non-competes are mainly used for deterrent effect and unlikely to be enforceable but which strike a note of terror in the heart of those workers. The ELA notes however that no UK commercial or industrial sector has been advocating for this reform and that it risks disturbing case law developed over many decades. ELA suggests more targeted reforms including clarifying the effect of garden leave on the duration of restrictive covenants, raising the threshold for an interim injunction (which is currently weighted towards the employer) and amending the rules on costs orders in interim applications. You can read ELA's proposals in full here.

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