Restrictive covenants and non-compete clauses, explained
The short answer
Restrictive covenants limit what you can do after leaving a job, such as joining a competitor or approaching clients. In Great Britain they are presumed unenforceable unless they protect a legitimate business interest and go no further than reasonably necessary. On 2 October 2026 no law capping or banning non-competes has been passed.
Restrictive covenants are terms in your contract that limit what you can do after you leave, for a set time or in a set area. The best known is the non-compete clause, which stops you working for a competitor or setting up a rival business. Others stop you approaching clients, poaching colleagues or using confidential information. They are common: the government estimates around five million employees in Great Britain have a non-compete clause.
In Great Britain the law starts from the position that a restraint of trade is unenforceable. A covenant can only be enforced if your employer shows it protects a legitimate business interest and goes no further than is reasonably necessary. As at 2 October 2026, the government has consulted on limiting or banning non-competes, but no change has been made to the law. This guide covers Great Britain; Northern Ireland has its own employment law.
Types of restrictive covenant
Acas describes four main types:
| Type | What it usually stops you doing |
|---|---|
| Non-competition | Working for a competitor, or starting a competing business, for a period or within a distance |
| Non-solicitation | Trying to win the business of your former employer’s clients or customers |
| Anti-poaching (non-employment) | Encouraging colleagues to leave with you |
| Non-disclosure (confidentiality) | Sharing sensitive or confidential information |
Citizens Advice also mentions non-dealing clauses, which stop you working with former customers you personally dealt with, even if they approach you.
Acas says restrictive covenants apply to people with employee status, not agency workers, casual workers or people on zero-hours contracts. It also says an employer will not usually be able to enforce them unless they are clear, specific and time-limited.
When a covenant can be enforced
A legitimate business interest
A covenant cannot be enforced just to stop competition. Your employer has to have something worth protecting, such as its client connections or confidential information. Citizens Advice puts it simply: your old employer cannot stop you taking a new job unless it could lose them money.
Reasonable in scope
The covenant must go no further than reasonably necessary. Citizens Advice says a restriction may be unreasonable if it:
- lasts longer than six months, unless that is standard in your industry;
- covers an area where your employer does not do business;
- stops you doing a job that does not compete with your old employer;
- effectively stops you finding any work.
Judged when the contract was made
In Tillman v Egon Zehnder (2019), the Supreme Court confirmed that restraints of trade are presumed to be unenforceable unless shown to be reasonable to protect the employer’s legitimate interests, and that reasonableness is assessed at the time the contract was made. That means a covenant signed when you were junior is judged against that role, which is one reason it can help to check whether you signed new covenants on promotion.
Cutting out the bad part
The same case decided that a court can sometimes remove offending words from a covenant and enforce what is left. It can do this only if the words can be removed without adding to or changing the rest, and the removal does not change the overall character of the contract. In that case the court removed the words “or interested” from a non-compete and enforced the remainder.
Where non-compete reform stands on 2 October 2026
It is easy to read that non-competes have been capped or banned. They have not.
- May 2023: after a consultation, the previous government said it would introduce a three-month statutory limit on non-compete clauses “when parliamentary time allows”. No legislation followed.
- 26 November 2025: the current government published a working paper asking for views on five options: a statutory limit on length (three months is suggested), limits that vary by company size, a complete ban, a ban below a salary threshold, or a ban below a threshold combined with a three-month limit above it. It said non-competes typically last around six months.
- 18 February 2026: the working paper closed. GOV.UK describes it as a discussion document to help decide whether and how to take proposals forward.
As at 2 October 2026, no government response has been published, and the Employment Rights Act 2025 and its implementation timeline do not include non-compete reform. Any change would need new legislation. Until then, the common law tests above apply. The working paper also notes that non-dealing, confidentiality and other covenants were not its main focus.
What your employer can do
Citizens Advice says that if you breach a covenant, your former employer can only stop you taking a new job by going to court. Citizens Advice notes that this is costly and time-consuming, which makes a compromise more likely.
Employment tribunals cannot hear claims about restrictive covenants or confidentiality; the order that gives tribunals their contract jurisdiction excludes them. These disputes go to the civil courts, which in Scotland means the Scottish courts.
Garden leave as an alternative
Some employers use garden leave during your notice period to keep you away from clients and information while you are still employed and paid. Acas says you are still employed during garden leave and must be paid as usual. See notice periods. It is worth checking whether your contract deducts time spent on garden leave from the length of any covenant.
Practical steps if you are moving to a competitor
- Find every set of covenants you signed, including in bonus, share or promotion documents.
- Read each one closely: what activity, which clients, what area and for how long.
- Compare it with your new role. Citizens Advice suggests you might ask your new employer to place you in a different role or area for a while.
- Consider talking to your old employer. Citizens Advice suggests explaining why the restriction should not apply and offering to keep to other obligations such as confidentiality.
- Keep confidential information safe. Do not take documents, client lists or data with you.
- If you receive a solicitor’s letter, take it seriously and note any deadline.
If you are paid to agree to new or extended covenants, for example in a settlement agreement, GOV.UK says payments for restrictive covenants are taxed in full.
What to check in your contract or letter
- Each restrictive covenant clause, and which documents they appear in (contract, bonus scheme, share plan, settlement agreement).
- The length of each restriction, and whether it runs from when you leave or from the start of garden leave.
- The geographic area, if there is one.
- The clients or colleagues covered: all of them, or only those you dealt with in a set period before leaving.
- The activities restricted, and whether they match what you actually did.
- A garden leave clause, and whether garden leave is set off against the covenants.
- Confidentiality clauses, and how long they say they last.
- Whether the covenants were updated when you were promoted or changed role.
- Any TUPE transfer, since covenants transfer with your contract (see TUPE transfers).
When to speak to a solicitor
Covenant disputes move quickly and can involve urgent court applications. It can help to speak to a solicitor before you accept a new role if your covenants look wide, if your old employer has written to you or your new employer, or if you are being asked to sign new covenants on leaving.
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Check my contractCommon questions
Are non-compete clauses enforceable in the UK?
Sometimes. The starting point is that a restraint of trade is presumed unenforceable. An employer has to show that the clause protects a legitimate business interest, such as client connections or confidential information, and is no wider than reasonably necessary in time, area and activity. The Supreme Court has said reasonableness is judged as at the date the contract was made, not when you leave.
Has the government banned non-compete clauses?
No. In May 2023 the previous government said it would legislate to limit non-competes to three months, but no law followed. In November 2025 the government published a working paper asking for views on options including a three-month limit, a ban below a salary threshold, limits by company size, or a full ban. It closed on 18 February 2026. On 2 October 2026 no response or legislation has been published.
How long can a non-compete last?
There is no statutory maximum on 2 October 2026. Each clause is judged on whether it is reasonable for that role and business. Citizens Advice suggests a restriction may be unreasonable if it lasts longer than six months, unless that is standard in your industry. The government's working paper says non-competes typically last around six months.
Can my old employer stop me starting a new job?
Citizens Advice says your former employer can only stop you taking a new job by going to court. Citizens Advice notes that court action is costly and time-consuming, which makes a compromise more likely. Employment tribunals cannot hear claims about restrictive covenants; these go to the civil courts.
Do restrictive covenants apply to workers and zero-hours staff?
Acas says restrictive covenants apply only to people with employee status, not to agency workers, casual workers or people on zero-hours contracts. Separately, the law stops employers using exclusivity clauses to prevent zero-hours workers, or workers earning below the lower earnings limit of £129 a week, from working for someone else at the same time. If you are unsure of your status, see our employment status guide.
Sources
- Acas: Terms restricting a worker's actions (updated 1 July 2026) checked Fri Oct 02
- Citizens Advice: If your employer says you can't work for a competitor (England) checked Fri Oct 02
- Tillman v Egon Zehnder Ltd [2019] UKSC 32 (National Archives Find Case Law) checked Fri Oct 02
- GOV.UK: Reform of non-compete clauses in employment contracts: working paper (published 26 November 2025, closed 18 February 2026) checked Fri Oct 02
- GOV.UK: Working paper on options for reform of non-compete clauses in employment contracts checked Fri Oct 02
- GOV.UK: Measures to reform post-termination non-compete clauses (consultation outcome, 12 May 2023) checked Fri Oct 02
- GOV.UK: Plan to Make Work Pay and Employment Rights Act, timeline update (updated 25 September 2026) checked Fri Oct 02
- Employment Tribunals Extension of Jurisdiction (England and Wales) Order 1994, articles 3 and 5 (restrictive covenant claims excluded) checked Fri Oct 02
- GOV.UK: Tax on termination payments: what you pay tax and National Insurance on checked Fri Oct 02
- Acas: When an employee does not have to work their notice (garden leave) checked Fri Oct 02
This guide is general information about employment law in Great Britain (England, Wales and Scotland). Northern Ireland has its own employment law. It isn't legal advice and doesn't take your circumstances into account.