You may remember that, back in 2020, the previous Conservative Government consulted on reforms to post-employment non-compete clauses (i.e., restrictions prohibiting an employee from going to work for a competitor or start a rival business after they have left employment). In May 2023, the Government confirmed that it was intending to introduce legislation to limit the duration of such clauses to just three months. See our previous articles on this at the time here, here, and here. The Conservative Government, however, did not introduce legislation to take this further.
Since coming to power, the Labour Government has remained silent on the issue of non-competes… until now. On 21 July 2025, during a House of Lords debate on the Employment Rights Bill, Baroness Jones of Whitchurch (Parliamentary Under-Secretary of State for the Department for Business and Trade), has put the issue of reform of non-competes in employment contracts back on the table.
In a debate about a proposed non-Government amendment in respect of workplace AI risk and impact assessments (which was ultimately withdrawn), Lord Pitkeathley of Camden Town made certain observations regarding the use of non-competes as a practice that can stifle “innovation, competition and the free flow of ideas”, particularly in relation to jobs in AI and innovation, and asked if the Government had been considering such concerns. In response, Baroness Jones confirmed that the Government has been reviewing the research and work done to date on non-compete clauses, and that it will be consulting on options for reform of non-compete clauses in employment contracts in due course.
It seems, therefore, that the Government will be consulting “in due course”– although precisely when remains unclear. Until the consultation is launched, we do not know what approach will be favoured by the Government. Will it stick with the Conservative’s proposal to limit such clauses to three-months or will it look again at the issue of payment during non-competes for example? Regardless, reform of non-competes appears to be back on the agenda.
We will continue to monitor developments in this space. For more information on how the Employment Rights Bill please visit our Reform Hub.
