Non-compete clauses: Government to investigate the impact

The Government’s view is that the UK thrives on innovation. It recognises that innovation enables businesses to develop new ideas, products and services and create new jobs and export opportunities.
With this in mind, the Government has launched a call for evidence to look at whether post-termination restrictions in employment contracts act as a barrier to employment, innovation and entrepreneurship. A post-termination restriction can prevent former employees from working for a competitor, contacting former clients or employing or engaging former work colleagues. The duration of such clauses may be as long as 12 months.
While the contractual clauses protect businesses, they can be restrictive on employees and considered anti-competitive if the clauses are wider than is necessary to protect the business.
It is difficult to see how banning the use of post-termination restrictions would generate innovation. The damaging effect on employers is clearer to see. An employer that has invested time and money in an employee who is then allowed to go off and immediately compete has lost any chance to protect its business and client relationships from that competition.
The consultation closes on 22 May 2016.

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Verity Buckingham

About Verity Buckingham

Verity is experienced in all aspects of employment law and corporate immigration matters. She deals mostly with corporate clients advising on contentious and non-contentious employment matters. Verity's contentious practice includes defending claims in the Employment Tribunal and experience of Employment Appeal Tribunal litigation in relation to claims of unfair dismissal, discrimination, equal pay and whistleblowing.

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