The Department for Business and Innovation (BIS) has launched a public consultation on non-compete clauses, as part of a drive to boost innovation.
The consultation asks about non-solicitation and non-poaching clauses as well as traditional non-compete clauses and gardening leave provisions.
The BIS is concerned that restrictive covenants may be hindering the creation of new businesses and movement of staff.
At present UK case law states that a restrictive covenant is void unless it is designed to protect legitimate business interests and no wider than is reasonably necessary. Some businesses will no doubt be concerned that any attempt to dilute this position will have a negative impact and mean that they cannot properly protect their client and staff lists.
On the other side of the argument, people like The Social Market Foundation want the government to entirely ban non-compete clauses in employment contracts.
No doubt the consultation will result in some very strong views on both sides of the argument and we will be awaiting the results with interest.
This call for evidence is seeking your views on whether non-compete clauses stifle entrepreneurship and innovation by preventing people from:
moving between employers
developing innovative ideas
creating a start-up
growing a business
We would like to hear your views, experience, and evidence of non-compete clauses so that we can understand:
when and why they are used
their prevalence
the benefits or disadvantages associated with them
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