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The government has issued a working paper on options for reforming non-compete clauses in employment contracts. The deadline for responding to the paper is 18 February 2026.
Somewhat unexpectedly, on 26 November 2025, the government issued a working paper inviting views on options to reform non-compete clauses in employment contracts. As you may remember, the previous government launched a similar consultation and had decided to limit the duration of non-compete clauses to three months post termination of employment. However, nothing was actioned before the change in government. The current government is now revisiting the subject as it is concerned about the restraint of trade effect on individuals bound by non-compete clauses and its wider impact on productivity, economic growth and innovation.
The options for reform include:
The paper also seeks views on whether limitations should also apply to other restrictive covenants and contracts other than employment contracts, as well as whether there are any cost barriers to bringing claims relating to restrictive covenants.
For further information on how this affects your business, please get in touch with your usual Baker McKenzie contact.
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