The government has announced plans to introduce new legislation to reduce the length of non-compete restrictive covenants to just three months. B P Collins’ employment team advises.
It adds that employers will still be able to restrict activities during (paid) garden leave or notice periods and the three month limit will apply only to non-compete post-termination covenants.
The government explained the reason behind its decision saying:
“[Non-compete restrictive covenants]…can play an important role in protecting businesses who invest in their staff, but unnecessarily burdensome clauses have become a default part of too many employment contracts, including where they fulfill no purpose. This can inhibit workers from looking for better paying roles, and limit the ability of businesses to compete and innovate.”
The new law won’t have an impact on non-solicitation clauses (which will continue to be subject to the ‘no more than is reasonably necessary to protect the employer’s legitimate business interests’), or confidentiality clauses.
The government added that it intends to legislate when parliamentary time allows.
Seismic changes could lie ahead for employers over the coming months. B P Collins will be keeping a close eye on any changes, ensuring clients remain fully informed and protected.