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05 May 2016

Review of non-compete clauses launched

Restrictive rules that may be stopping employees from going into business on their own after leaving a job are to be looked into, it has been announced.

Business Secretary Sajid Javid says he wants to sweep away any barriers that are unfairly hampering entrepreneurship and innovation.

It is hoped the move will boost small businesses and encourage more start-up enterprises.

One of the practices to be looked at, says Mr Javid, is the use of non-compete clauses.  Written into employment contracts, they can stop workers competing against former employers for up to nine months after leaving their jobs. They can also prevent people from working for their former employer's competitors. 

The clauses are only enforceable if they are reasonable and protect a legitimate interest. But there are fears they can stifle new businesses by stopping them from recruiting the best talent.

Employers and individuals are to be surveyed online for their views on whether such practices are curbing entrepreneurship.

The results will be used to help shape an Innovation Plan. Set to be published later in the year, the plan forms part of the Government's bid to make the UK the best place in Europe to launch a business.

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