Non-Compete Clauses Under Review: What Could Change and What to Do Now

If your contracts include a clause stopping former employees joining a competitor, this is worth watching closely. The government is actively considering major reform to non-compete clauses, with options on the table ranging from a simple time limit to an outright ban. Nothing has changed yet — but the direction of travel is worth understanding now, not once a decision lands.

This guide explains what’s being proposed, in plain English, with no assumed knowledge.

A quick explainer of the terms you’ll see

• Non-compete clause — a clause in an employment contract that stops a former employee working for a competitor, or starting a competing business, for a period after they leave.
• Restrictive covenant — the broader legal term covering non-compete clauses and related restrictions, including non-solicitation clauses (preventing someone poaching clients) and non-dealing clauses (preventing someone doing business with former clients).
• Department for Business and Trade (DBT) — the government department leading this consultation.
• Working paper — a government document setting out policy options and inviting feedback, used here instead of a firm proposal, because no single approach has yet been chosen.

Where this actually stands right now

This is important: nothing has changed in the law yet. On 26 November 2025, the Department for Business and Trade published a working paper setting out several possible approaches to reforming non-compete clauses, and invited responses. That consultation closed on 18 February 2026, and as of now, the government’s response — confirming which option, if any, it intends to pursue — has not yet been published.

This means employers should treat this as a live area to watch, not something requiring immediate contract changes. But given the direction of policy, and how long these things tend to take to actually land, this is a sensible moment to start thinking ahead.

What’s actually being considered

The working paper set out several possible options, rather than a single preferred approach:

• A statutory time limit on how long a non-compete clause can run — for example, three months, which was the figure proposed (but never legislated) under the previous government.
• A limit based on employer size — potentially a shorter limit for larger employers and a longer one for smaller businesses, on the basis that SMEs and start-ups may have a stronger need for protection.
• An outright ban on non-compete clauses in employment contracts altogether, bringing the UK into line with some other countries.
• A ban below a salary threshold, protecting lower-paid workers specifically while still allowing non-competes for higher earners.
• A hybrid approach, combining a salary threshold ban with a capped duration for those earning above it.

The government has also asked whether any reform should extend beyond non-compete clauses specifically, to cover other restrictive covenants like non-solicitation or non-dealing clauses — partly to prevent employers simply relabelling a non-compete as something else to sidestep new rules.

Why this matters, even before anything changes

An estimated five million UK workers are currently subject to some form of non-compete clause, often lasting around six months — so this isn’t a niche issue. A few things are worth understanding about the direction of travel:

• A complete ban has not been ruled out, but nor has it been confirmed — it remains a genuine option under active consideration, not just background noise.
• Whatever is decided, existing “one-size-fits-all” long non-compete clauses are unlikely to age well. Even a modest reform (a time limit, or a salary threshold) would leave many current clauses unenforceable or partially so.
• This has genuine cross-party momentum. Reform has been under discussion in some form since 2016, and current signals suggest change is more a question of “when” than “if” — even without a confirmed timetable.

What employers should do now

1. Audit your existing restrictive covenants. Are your non-compete clauses narrowly drafted and genuinely necessary, or are they broad, long, and applied uniformly regardless of seniority or role?
2. Consider whether your protection actually needs to come from a non-compete at all. Confidentiality provisions, non-solicitation clauses, and well-drafted notice periods or garden leave provisions can often protect a legitimate business interest without relying on a lengthy non-compete.
3. Don’t over-rely on non-competes for junior or lower-paid roles. If a salary threshold approach is adopted, clauses covering lower earners are the most likely to become unenforceable first.
4. Watch for the government’s consultation response. Once published, it should indicate which option (if any) is being taken forward, and give a clearer sense of timing.
5. Review new contracts with this in mind, particularly for senior or high-risk roles where protection genuinely matters — but avoid assuming a long non-compete is currently, or will remain, a safe default.

How Cheviot HR can help

Whatever the government ultimately decides, well-drafted, proportionate restrictive covenants are good practice regardless. We can review your current contracts, assess whether your non-compete and related clauses are genuinely fit for purpose, and help you build protections that don’t rely on a single clause doing all the work.

Get in touch at heidi@cheviothr.co.uk or visit https://cheviothr.co.uk to talk through what this means for your business.