TRW & Co · UK employment law
Non-Compete Clauses in UK Employment Contracts
A non-compete clause UK courts will enforce must protect a legitimate interest and be no wider than reasonably necessary, judged when the contract was signed. This guide explains the restraint of trade test, garden leave, severance, the government's October 2026 announcement that it will legislate to restrict non-competes, and how to draft covenants that hold up.
Key pointReasonableness is judged at the date of signing, not the date of departure, so a covenant signed by a junior hire is rarely saved by later promotion. Refreshing covenants with fresh consideration on promotion is one of the cheapest and most effective protections an employer has.
At a glance
The core test
A non-compete is void as a restraint of trade unless it protects a legitimate interest and goes no further than reasonably necessary, judged when it was agreed.
Legitimate interests
Employers can protect client and supplier connections, confidential information and workforce stability, but never competition as such.
Limited severance
Since Tillman v Egon Zehnder, courts can delete unenforceable words if no rewriting is needed, but will not redraft an unreasonable covenant.
Reform announced
After a November 2025 working paper, the Prime Minister announced in October 2026 that the government will legislate to restrict non-competes.
Garden leave counts
Courts look at garden leave and post-termination restrictions together, so offsetting garden leave against a non-compete improves its prospects.
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Is a non-compete clause UK courts will enforce still possible? The short answer
Yes. A non-compete clause UK courts will enforce must protect a legitimate business interest and go no further than reasonably necessary to protect it, judged at the date the contract was signed. Restrictions that simply stop a former employee competing are void as a restraint of trade. Most enforceable non-competes are short, tied to a defined competing business and a defined role, and backed by a clear interest such as client relationships or confidential information.
As of October 2026 there is no statutory cap on non-compete clauses in Great Britain. That is likely to change. The government published a working paper on reform options in November 2025, and in October 2026 the Prime Minister announced that the government will legislate to restrict non-competes in employment contracts. The detail had not been published at the time of writing.
For employers, the practical answer is to draft covenants now that would survive both the current common law test and a likely statutory limit: shorter non-competes, stronger non-solicitation and non-dealing covenants, and a well-drafted garden leave clause.
The legal test: restraint of trade in England and Wales
Non-compete clauses are governed by the common law doctrine of restraint of trade, not by statute. The starting point, established over a century ago in Herbert Morris Ltd v Saxelby, is that a covenant restricting an employee's freedom to work after employment is void unless the employer shows it is reasonable.
The two questions a court asks
- Is there a legitimate interest? An employer cannot protect itself against competition as such. It can protect trade connections with clients and suppliers, confidential information and trade secrets, and the stability of its workforce.
- Is the restriction no wider than reasonably necessary? The court looks at duration, geography, the activities restricted and the employee's role and seniority, viewed at the date the covenant was agreed, not when it is enforced.
Because reasonableness is judged at the outset, a covenant that was too wide when signed cannot be saved because the employee later became more senior. That is why covenants should be refreshed on promotion, with fresh consideration such as a pay rise or bonus eligibility.
Severance after Tillman
In Tillman v Egon Zehnder Ltd [2019] UKSC 32, the Supreme Court held that a court may remove unenforceable words from a covenant, provided what remains needs no rewriting and the removal does not change the overall effect of the restraints. Severance is a safety net, not a drafting strategy: a non-compete clause UK courts can only save by deleting words was probably drafted too widely in the first place. The Supreme Court's case page includes a press summary of the reasoning. Courts will not rewrite a covenant to make it reasonable.
Other rules that affect enforceability
If the employer commits a repudiatory breach, such as dismissing without proper notice where the contract does not permit payment in lieu, the employee may accept the breach and be released from the covenants. A carefully drafted payment in lieu of notice clause reduces that risk.
The principles are similar in Scotland and Northern Ireland, though procedure and remedies differ. Covenants given by a seller of a business or a shareholder are treated more generously than employee covenants, because the parties bargain on more equal terms. For transactions, see our business sale practice.
Types of restrictive covenant compared
A non-compete is the bluntest restriction and the hardest to enforce. Most well-drafted contracts use a package of covenants, each targeted at a specific interest, so that if one fails the others stand.
| Covenant | What it restricts | Interest usually relied on | Enforceability in practice |
|---|---|---|---|
| Non-compete | Working for, or setting up, a competing business | Confidential information; client connections where other covenants would be hard to police | Hardest to enforce; usually needs a short duration, defined competitors and senior or sensitive role |
| Non-solicitation of clients | Actively approaching clients the employee dealt with | Client connections | More readily enforced if limited to clients dealt with in a recent look-back period |
| Non-dealing | Doing business with those clients, even if they approach the employee | Client connections | Enforceable where solicitation would be hard to prove; needs tight client definition |
| Non-poaching of staff | Recruiting or enticing away colleagues | Workforce stability | Usually limited to senior or key staff the employee worked with |
| Confidentiality | Using or disclosing confidential information | Confidential information and trade secrets | No time limit needed for genuine trade secrets; general skill and knowledge cannot be restricted |
For trade secrets specifically, see our guide to protecting trade secrets, which explains how confidentiality and the Trade Secrets Regulations interact with employment contracts.
Garden leave and how it interacts with a non-compete clause UK employers rely on
Garden leave lets an employer keep an employee on full pay during the notice period while excluding them from work, clients and systems. The employee remains employed and bound by the duty of fidelity, so they cannot join a competitor in that period.
An employer generally needs an express contractual right to place an employee on garden leave. Without it, removing duties can, in some roles, be a breach of contract that releases the employee from the covenants.
Courts look at garden leave and post-termination restrictions together. A long garden leave followed by a long non-compete may be seen as excessive. Many contracts therefore provide that the non-compete period is reduced by any time spent on garden leave. That offset makes a non-compete clause UK courts are asked to enforce look more proportionate.
Courts can enforce garden leave by injunction, but they are reluctant to keep someone out of the market for very long periods. Treat the combined length of garden leave and any non-compete as the real restriction, and justify that total.
Drafting covenants that hold up: a step-by-step approach
Generic covenants copied across a workforce are the most common reason employers lose. Drafting a non-compete clause UK judges will uphold is a role-by-role exercise.
- Identify the interest. Record, for each role, which clients, information and colleagues the employee has access to and why that would harm the business in a competitor's hands.
- Tier the workforce. Use stronger covenants for senior, client-facing and strategic roles; use confidentiality and light non-solicitation for others.
- Keep durations short. Match the period to how long client relationships or information stay valuable, and offset garden leave.
- Define the restricted activity. Name the business, products, services and the employee's role in it, rather than banning any involvement with any competitor.
- Use look-back periods. Limit client covenants to clients the employee dealt with, or had material information about, in a recent period before termination.
- Draft for severance. Write each covenant as a separate, free-standing obligation so a court can remove one without rewriting the others.
- Refresh on promotion. Re-sign covenants when roles change, with fresh consideration, and keep signed copies.
The proposed reform of non-compete clauses
Reform would change how every non-compete clause UK employers use is assessed, and it has been on the agenda for several years. The previous government announced in May 2023 that it would limit non-competes to three months, but no legislation was passed before the change of government.
On 26 November 2025, the current government published a working paper on options for reform of non-compete clauses in employment contracts. It sought views, until February 2026, on options including:
- a statutory limit on the length of non-competes, possibly varying by employer size;
- an outright ban on non-competes;
- a ban for workers below a salary threshold; and
- a combination of a ban below a salary threshold and a statutory duration limit above it.
The paper also asked whether limits should extend to other restrictive covenants and to contracts other than employment contracts.
On 9 October 2026, the Prime Minister announced that the government will legislate to restrict non-compete clauses. As of October 2026, no option had been confirmed, no bill had been published and no commencement date had been set. Existing covenants remain governed by the common law test.
Employers should assume that any new rule may apply to existing contracts, unless transitional provisions say otherwise, and plan accordingly. For other changes affecting contracts, see our overview of the Employment Rights Act 2025.
Enforcing a non-compete clause UK courts are asked to uphold
Enforcement usually happens fast. An employer that learns a former employee has joined a competitor in breach of a covenant typically writes to the employee, and often to the new employer, asking for undertakings. If those are refused, it applies to the High Court for an interim injunction under Part 25 of the Civil Procedure Rules.
At the interim stage the court asks whether there is a serious issue to be tried, whether damages would be an adequate remedy, and where the balance of convenience lies. In covenant cases the court often orders a speedy trial so that the dispute is decided before the restriction expires. The employer must usually give a cross-undertaking in damages, meaning it compensates the employee if the injunction later proves unjustified.
Where confidential information has been taken, a court may grant springboard relief to remove an unfair head start, even if the non-compete itself fails. Confidential information can also be protected under the general law and the Trade Secrets (Enforcement, etc.) Regulations 2018. Evidence matters: forensic review of devices, email forwarding and downloads in the final weeks of employment is often decisive.
For employees, the same analysis works in reverse. A non-compete clause UK judges consider too wide, too long or unsupported by a real interest can be challenged, and an employee who has been wrongfully dismissed may be released from it altogether.
Illustrative scenario: a departing sales director
This scenario is illustrative only. It does not describe any real client or outcome.
A sales director at a software company resigns to join a direct competitor. Her contract contains a twelve-month non-compete covering "any business competing with the Company or any Group Company anywhere in the world", a twelve-month non-solicitation of clients, and a six-month notice period with a garden leave clause. The contract was signed when she joined as an account manager five years earlier and was never updated.
The non-compete is vulnerable. It was drafted for a junior role, covers group companies she never worked for, applies worldwide and does not offset garden leave. A court would judge it as at the date it was signed. Severance might remove the group reference, but it would not shorten the period or narrow the geography.
The client non-solicitation is stronger if limited to clients she dealt with. The company places her on garden leave, writes to remind her of her obligations, and focuses enforcement on the non-solicitation and confidentiality terms. It also preserves evidence of any downloads of client data in her final weeks, which could support injunctive relief for breach of confidence.
Risks and common mistakes
One-size-fits-all covenants
Applying the same twelve-month non-compete to every employee from receptionist to managing director is the most common error. Courts assess each covenant against the particular employee's role at the date of signing. A covenant that would be reasonable for a director may be wholly unreasonable for a junior employee, and a court will not rewrite it. Tiered templates, tied to role and seniority, are far more likely to be upheld and are also easier to defend under any future statutory regime.
No consideration for new covenants
Introducing covenants for existing employees without giving anything in return risks the covenants being unenforceable for lack of consideration. A promotion, pay rise, bonus or share award linked expressly to signing the new terms solves the problem. Simply continuing employment is a weak basis. Keep a signed copy, and do not rely on an employee "accepting by conduct" a handbook update containing restrictions.
Breaching the contract on exit
Employers sometimes undermine their own covenants by dismissing without notice where there is no right to pay in lieu, withholding contractual pay or bonus, or removing duties without a garden leave clause. If that amounts to a repudiatory breach and the employee accepts it, the covenants fall away. Manage the exit carefully and take advice before any step that departs from the contract.
Acting too slowly when a breach is suspected
Injunctions to enforce covenants are discretionary. Delay suggests the matter is not urgent and can be fatal to an interim application. Gather evidence quickly, send a measured letter, and be ready to apply to court within days rather than weeks. Our restrictive covenants team acts for employers and employees on urgent enforcement and defence.
Cross-border issues: groups, secondees and Bangladesh
Group executives often sign covenants governed by a foreign law, or covenants in share plans and shareholder agreements governed by a different law from their employment contract. An English court may still apply English public policy on restraint of trade, and enforcement abroad depends on local law.
Bangladesh is a good example of the contrast. Section 27 of the Bangladesh Contract Act 1872 treats agreements in restraint of a lawful trade or profession as void, subject to limited exceptions such as on the sale of goodwill. A post-employment non-compete that might be enforceable in London may therefore be unenforceable against the same executive in Dhaka. Groups operating in both countries should rely more heavily on confidentiality, non-solicitation and garden leave, and consider where any injunction would actually need to be enforced. Our UK–Bangladesh team advises on both sides.
What to do next: a checklist
- Audit covenants by role and seniority, and identify outdated templates.
- Record the legitimate interest each covenant protects.
- Shorten non-competes, define competitors and activities, and offset garden leave.
- Strengthen non-solicitation, non-dealing and confidentiality terms.
- Add or update garden leave and payment in lieu of notice clauses.
- Refresh covenants on promotion, with fresh consideration.
- Track the government's legislation and plan for any limit on existing contracts.
We advise employers and senior executives on drafting, reviewing and enforcing every non-compete clause UK businesses depend on, including in senior executive hires and exits. To discuss a covenant or a departing employee, contact our London office.
Frequently asked questions
01Are non-compete clauses enforceable in the UK?
They can be, but only if the employer shows the clause protects a legitimate business interest, such as client connections or confidential information, and is no wider than reasonably necessary in duration, geography and activities restricted. Reasonableness is judged at the date the contract was signed. A clause that simply prevents competition is void. In practice, short non-competes for senior or client-facing staff, tied to defined competing activities and offset against garden leave, have the best chance of being enforced.
02How long can a non-compete clause last in the UK?
As of October 2026 there is no statutory maximum. Courts decide what is reasonable on the facts, considering the role, the sector and how long the protected information or relationships remain valuable. Shorter restrictions are far easier to justify than long ones, and garden leave is usually taken into account. The government has announced that it will legislate to restrict non-competes, and its 2025 working paper discussed options including a statutory duration limit, but no limit had been enacted at the time of writing.
03Is the UK banning non-compete clauses?
Not yet. In November 2025 the government published a working paper consulting on options including an outright ban, a ban below a salary threshold, a statutory duration limit, and a combination of these. On 9 October 2026 the Prime Minister announced that the government will legislate to restrict non-compete clauses in employment contracts. As of October 2026, the chosen option, the legislation and its start date had not been published, so existing clauses remain subject to the common law restraint of trade test.
04What is the difference between garden leave and a non-compete?
Garden leave applies during the notice period: the employee stays employed and paid but is told not to work or contact clients, and remains bound by their employment duties. A non-compete applies after employment ends and restricts working for a competitor. Courts look at both together, so a long garden leave followed by a long non-compete may be unreasonable. Many contracts reduce the non-compete period by any time spent on garden leave, which helps enforceability.
05Can I be released from a non-compete if my employer breaches my contract?
Potentially, yes. If the employer commits a repudiatory breach, such as dismissing you without notice where the contract does not allow payment in lieu, or failing to pay contractual sums, and you accept that breach by treating the contract as at an end, you may be released from post-termination restrictions. Whether a breach is serious enough is fact-specific, and acting on it carries risk, so take advice before relying on it.
06What can an employer do if a former employee breaches a non-compete?
The main remedy is an interim injunction to stop the breach, usually followed by an expedited trial. Courts may also grant springboard relief to remove an unfair head start gained through misuse of confidential information. Damages or an account of profits may be available. Speed is critical: delay can defeat an injunction application. The employer should preserve evidence, write to the employee and the new employer, and be ready to issue proceedings promptly.
Sources and official materials
- Tillman v Egon Zehnder Ltd [2019] UKSC 32 — Supreme Court on severance of restrictive covenants
- Working paper on options for reform of non-compete clauses — November 2025 government reform options
- Supreme Court: Tillman v Egon Zehnder case page — Judgment and press summary
- Employment Rights Act 1996 — Statutory framework for employment contracts and notice
- GOV.UK: Employment contracts — Official guidance on contract terms
General information only, current as at 21 October 2026. It is not legal advice and does not create a solicitor–client relationship. It reflects the law of England and Wales unless stated otherwise; Scotland and Northern Ireland have separate legal systems, and the law changes frequently. Check current official sources and take advice on the facts of your matter.