Are you one of the 1 in 4 UK workers tied to a non-compete clause in your contract?

5 min read | Lorraine Twist | Article | Starting a new job General

non-compete clauses in contracts

To compete, or not to compete? This question has been subject to considerable debate in recent years. Five US states have now banned non-compete clauses – with a few rare exceptions – while a further 20 states have implemented various restrictions on such contracts.

In the UK, however, all employers are currently free to include non-competes in their workers’ contracts as they please. In fact, over a quarter (26%) of UK professionals say they have a non-compete clause in their current employment contract, according to a 2024 government report. In reality, this figure could be higher, as a further 23% are unsure whether they do or not.

Are you a part of the 26%? Perhaps you’re unsure what a non-compete clause is exactly, why there’s debate surrounding them, and what to do if you’re faced with one. We’re here to answer some of your most frequently asked questions…

 

What is a non-compete clause?

Non-compete clauses are a type of “restrictive covenant” that are included in employees’ contracts to stop them working for a competitor for a set period of time after they leave their current organisation. The duration of a non-compete clause typically ranges from three months to one year, and usually covers a set geographical remit. Some prohibit workers from setting up their own business or being employed by any organisation within the same industry, while others more specifically list the names of key competitors that must be avoided.

“The duration of a non-compete clause typically ranges from three months to one year, and usually covers a set geographical remit.”

Other forms of restrictive covenants include: a non-solicitation clause, which prevents former employees from encouraging any clients of their ex-employer to move their business to their new organisation; non-deal, which bans any contact with existing clients even if a relationship is already in place at the employee’s new workplace; and non-poaching, which forbids influencing any former colleagues to join a worker’s new organisation.

 

Why are non-compete clauses controversial?

Non-competes are the most limiting of all the restrictive covenants. While the benefits for employers include improving staff retention, the reason for this could be largely down to their employees being blocked from moving to the roles that their experience and industry knowledge would be most suitable for. Some people may feel chained to an organisation, rather than choosing to stay because of job satisfaction – potentially leading to an unhappy, disengaged workforce.

Sometimes, these clauses even apply to those who have been made redundant, making it more difficult for them to secure meaningful employment for the duration of the restriction. It can be incredibly disruptive to a person’s life, which is exasperated the longer the limitations apply. Currently, for employers who utilise non-compete clauses, the most common duration is six months (43%) followed by 12 months (33%).

 

Are non-compete clauses enforceable?

So, what would happen if you breached a non-compete clause? Well, it depends on how reasonable the clause is. Your former employer could technically take you to court, but whether or not they would be successful would depend on how reasonable the court deems the terms of the agreement to be. They would consider if the geographical limitations are excessive, or if the timeframe seems unwarranted for your level of seniority. Is there a case for why your former employer has this clause that the court would deem reasonable? If not, there will likely be no further action taken.

In May 2023, the UK government announced plans to tighten non-compete regulations by limiting the duration of such agreements to a maximum of three months. However, there’s no set timeframe for these legislative changes; they’ll be implemented ‘when parliamentary time allows.’ And, with the next general election due to take place within the next year, it’s possible that this could alter the course of action entirely.

So, if you’re concerned that you may be tied to a non-compete clause, first, check your contract. You may find it’s actually one of the less restrictive clauses that will likely have less of an impact on your job search: non-solicitation or non-deal, for example. If you discover that your contract does include a non-compete clause, then consider if it’s enforceable. Ask yourself if the duration and geographical scope seem reasonable. If in doubt, speak to your employer to see if they can exercise some flexibility.

Interested in exploring the latest job opportunities? Check out our live vacancies – we add new roles daily.

 

About this author

Lorraine Twist, Director, National Accounts, Hays

 

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