There has always been a need to strike a balance between protecting the interests of an employer and an employee when the employment relationship comes to an end. One way this is done is through the use of restrictive covenants or post-termination restrictions. One type of restrictive covenant is a non-compete clause, which restricts where an employee can be employed following their termination.
There are different types of restrictive covenants including non-solicitation and non-dealing clauses however, non-compete clauses are seen as the most restrictive type.
Back in 2020 the government launched a consultation into the use and reform of non-compete clause. They have recently published their response to this consultation. The government has committed to introducing the following:
The Government currently has no plans to apply the three-month limit to other types of restrictive covenants such as non-solicitation and non-dealing or clauses preventing poaching of employees or interfering with suppliers, subject to the normal considerations of reasonableness.
It is worth bearing in mind that if and when these changes do come into force, limiting a non-compete to 3 months will not automatically make it legally enforceable as there will be no change to the requirement for these clauses to be reasonable in order to be enforceable.
There are different types of restrictive covenants including non-solicitation and non-dealing clauses however, non-compete clauses are seen as the most restrictive type.
Back in 2020 the government launched a consultation into the use and reform of non-compete clause. They have recently published their response to this consultation. The government has committed to introducing the following:
- A three-month limit to non-compete clauses.
- No mandatory compensation for non-compete clauses, and
- Guidance on non-compete clauses.
The Government currently has no plans to apply the three-month limit to other types of restrictive covenants such as non-solicitation and non-dealing or clauses preventing poaching of employees or interfering with suppliers, subject to the normal considerations of reasonableness.
It is worth bearing in mind that if and when these changes do come into force, limiting a non-compete to 3 months will not automatically make it legally enforceable as there will be no change to the requirement for these clauses to be reasonable in order to be enforceable.
