GOVERNMENT OPENS CONSULTATION INTO NON-COMPETE CLAUSES

The Government is currently looking at ways to boost innovation and business to help support the recovery of the economy from the impacts of Covid-19

Currently in consultation is the use and suitability of Non-Compete clauses which are often used in contracts of employment to protect a businesses IP and to prevent an individual from directly working for a competitor which may have a negative effect on your business.

In order to create the new jobs required and increase competition the Government is currently consulting on two areas:

• A: Mandatory Compensation – this is looking at making non-compete clauses only enforceable when the employer provides compensation for the full term of the clause. This may also include statutory limits on non-compete clauses.

• B: Ban Non-Compete Clauses – the second option is to effectively ban non-compete clauses entirely by making the clause in the contract of employment unenforceable.

Our current understanding is that the consultation closes on 26th February 2021.