Is the end of non-compete clauses on the horizon? Government consults on reform

The UK Government has published a working paper exploring potential reforms to non-compete clauses, signalling growing concern that these restrictions may be stifling business growth and restricting employee mobility. Also known as restrictive covenants or post-termination restrictions, non-compete clauses prevent employees from joining or starting a competing business after leaving their role.

The consultation sets out several reform options. These include introducing a statutory limit on the length of non-compete clauses, linking restrictions to business size so smaller employers are less likely to impose long restrictions, limiting non-compete provisions to high earners only, and in the most extreme scenario, introducing an outright ban on non-compete clauses.

For employers, changes could have a profound impact on how restrictive covenants are drafted and enforced. Existing contracts may need reviewing to ensure they remain appropriate, enforceable and consistent with any new legal requirements. For employees, reforms could mean greater freedom to move between roles or start new ventures without the risk of breaching contractual restrictions or facing legal action.

The Government invited stakeholders to submit responses and views by 18 February 2026. This provided an opportunity for businesses, HR teams and legal advisers to provide input if they had concerns about the current use or enforceability of non-compete clauses.

At Gannons, our Employment team regularly advises both employers and employees on drafting, reviewing, and enforcing restrictive covenants. We can help ensure your employment contracts are robust, appropriately drafted and kept under review as the law develops.

This consultation represents a potentially significant shift in employment law. Employers should keep their contracts under review, while employees should understand how any changes might affect their career mobility.

Follow us for updates on this consultation and other developments in employment law — we will continue to keep you posted.