Over the years, from time to time, we have reported on rumoured plans to regulate the use of post-termination restrictions in employment contracts. So what more have we learnt from a recent government announcement made shortly before Christmas?
What’s the background?
Employers invest considerable time and money in building up and protecting valuable banks of confidential information, as well as developing close and effective business relationships with their trading partners (especially their customers or clients). These ‘business interests’ may be put at risk if key employees leave their employment with a view to joining a competitor or setting up a rival business of their own.
Our courts have long acknowledged that employers have a legitimate right to protect their business interests by including post-termination restrictions in their contracts of employment. These restrictions typically seek to restrict the employee’s ability to unfairly compete with their former employer for an agreed period of time after they leave their employment. The problem, for both employer and employee, is that there can be considerable uncertainty as to precisely when a court will uphold such restrictions and when it won’t. These restrictions are also seen by many to be anti-competitive; unfairly restraining employees and preventing them from moving freely between employers. Could they even be partly responsible for limiting the UK’s economic growth?
The previous Conservative Government considered legislating to more directly regulate post-termination restrictions and consulted on the idea. Now the Labour Government is taking a closer look at the issue itself.
What does the current government have in mind?
Towards the end of last year, the Government published a document outlining various options for the regulation and reform of non-compete clauses in employment contracts. They are currently seeking views on the possibility of:
If any of these policy options were to find their way into law, they would have a significant impact on the question of whether and when employers can include valid non-compete clauses in their employment contracts.
What do you think?
If you’re interested in having your voice heard on this issue, you have until 18 February 2026 to submit your views. Just as soon as we hear anything more about the results of this consultation exercise, we’ll be sure to report back.
James qualified as a solicitor in 2001, having completed his academic studies at the University of Sheffield. Throughout his career, he has worked for a number of prestigious regional law firms, joining stevensdrake as Head of Employment Law in 2012.
As well as pursuing and defending the full range of Employment Tribunal claims, James spends a considerable amount of his time providing advice and support to businesses of various sizes. He advises on a wide variety of HR and employment law issues, including employment contracts, HR processes and procedures, grievances, disciplinary issues, absenteeism, performance management and settlement agreements. He also regularly helps clients with redundancy exercises and internal reorganisations.
James has previously been described as an ‘Associate to Watch’ by Chambers UK, an independent guide to the legal profession. His clients regard him as “thorough”, “easy to work with” and someone who avoids blinding them with legal jargon.
Outside of work, James balances family life with ambitions of swimming, running and cycling a bit faster.
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