16 May 2023

Reform of non-compete clauses

Non-compete clauses are widely used by employers to protect their legitimate business interests.

The Government have been concerned that non-compete clauses are a barrier to economic growth and undertook a consultation on the matter.

Last week, the Government announced that it will introduce legislation to limit the length of non-compete clauses to 3 months.

This will not interfere with the ability of employers to place employees on garden leave, or to include non-solicitation clauses in contracts.

A lengthy notice period together with a garden leave clause in the contract, is arguably the safest way to protect an employer’s business, rather than relying on a Judge having the same view as to whether the non-compete clause merely adequately protects the employer’s legitimate business interests.

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