The prime minister’s announcement of plans to ban so-called non-compete clauses in employment contracts leaves many questions unanswered, specialist solicitors said today.
Andy Burnham announced on Friday that the government would 'legislate to make sure that non-compete clauses will no longer be a barrier to hiring for our most promising start-ups and scaling firms'. In a speech to an 'Innovation Nation' event in Manchester, Burnham described constraints on working for a competitor as 'a drag on innovation'. His comments came almost a year after the government opened a consultation on a range of potential reforms, incuding limits and an outright ban.
Dan Pollard, partner at employment law firm Fisher Phillips, said Burnham's announcement was short on detail. 'The Starmer administration published a thoughtful working paper in November 2025 setting out several options, including an outright ban, a limit on the duration of restrictions, and a salary threshold. We have yet to see which of these Andy Burnham has chosen,' Pollard said. 'His focus on start-ups, scaling firms and the "everyday economy" suggests he may be planning something different altogether, and employers need clarity on where the lines will be drawn.'
Corinne Aldridge, head of employment at London firm Kingsley Napley, noted that a six-month notice period followed by a six months to a year non-compete period is not unusual for senior executives. 'Whilst today’s announcement signifies the government are alive to this, some will be disappointed by the lack of concrete detail following the recent review under Sir Keir Starmer. We still don't know for sure whether non-competes will be outlawed altogether or reduced to say a three months cap with pay. If the former, as some are hoping for after Andy Burnham’s words this morning, then this would be a significant and radical change. However there is a balance to be struck between existing and prospective employers.'
Pollard said that business opinion is divided on whether non-competes enhance or hinder innovation. He continued: 'If the government really wanted to make the UK an "innovation nation", it would abandon its misguided reform of unfair dismissal law. From 1 January 2027, employees will be entitled to uncapped compensation, making the UK a significantly less attractive destination for global employers,' he said. 'These measures will discourage innovators from taking the risk of hiring staff in the UK, and no reform of non-competes will offset that damage.'
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