BIS calls for evidence on the impact of employment non-compete clauses

This follows the issuing in May 2016 by the Department for Business, Innovation and Skills (BIS) of a call for evidence on the impact of such clauses, specifically on the extent to which they are stifling British entrepreneurship.

A particular topic of discussion focussed on what might replace the current common law position on non-compete clauses, should the Government feel it necessary having taken evidence to legislate.

Other models from around the world were discussed, such as the more highly regulated systems operated in many European countries such as Germany and Belgium, where, for example, former employees continue to receive some or all of their remuneration from their former employers during the restrictive period) or the imposition of a blanket ban (such as applies in California). Of course, there is scope for the imposition of a radical new “British” regime.

Whilst change, if any, still seems a distant prospect – especially when one considers the technicalities involved in implementing a statutory regime in such a fact-sensitive area – indications are that there are powerful driving voices in Government behind this call for evidence. As such, reform of the current law on non-compete provisions, whether large or small in nature, cannot be written off at this stage.

We will write again further when any concrete proposals for reform are published.

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