The role of non-compete clauses in employment contracts is under renewed scrutiny amid calls from some British entrepreneurs and investors for legal reform to boost talent mobility in the country’s tech sector. Non-competes, which restrict employees from joining rival firms after leaving their jobs, are viewed by many as a barrier to rapid hiring and scaling of businesses.

At a recent panel discussion held during the Labour Party conference in Liverpool, Eva Barboni, director of the entrepreneurs’ lobby group Enterprise Britain, argued for a government ban on non-compete clauses. She proposed granting workers a unilateral right to reduce their notice periods to one month, aiming to align British hiring practices more closely with those in the United States, where talent moves between companies with fewer restrictions. Barboni said the current system, where senior candidates face notice periods and post-termination covenants that can extend up to a year, “has a massive chilling effect on movement of talent,” particularly among highly skilled individuals.

This stance gained support from a coalition of over 20 founders, executives, and investors behind an open letter calling for legislative changes. The letter also highlighted concerns about lengthy notice periods and extended gardening leave, urging the government to impose limits on these practices as well. Research by Enterprise Britain indicates that 87% of the country’s fastest-growing companies view non-compete clauses as a hiring obstacle.

However, the proposals have met resistance from some quarters within the entrepreneurial community. Debbie Wosskow, co-chair of the Invest in Women Taskforce and a serial entrepreneur, warned that removing non-competes could undermine business value, especially during company sales or transactions. She expressed concern that key personnel with short notice periods might disrupt deal negotiations. Anthony Rose, founder of the start-up support platform SeedLegals, described calls to ban non-competes as detrimental, suggesting the push was driven by a small group of well-funded AI firms prioritizing their own interests over the broader ecosystem.

Others, including early-stage investor Eileen Burbidge, acknowledged the drawbacks of non-competes while emphasizing the need for alternative ways to ensure team loyalty and commitment. Burbidge noted that in Silicon Valley—widely regarded as a tech hub—non-competes are generally unenforceable, a factor some see as contributing to its innovation-driven growth. Similarly, James Harrison, founder of biotech company Cycle Pharmaceuticals, pointed out that in fast-paced fields like tech and biotech, where information rapidly becomes outdated, lengthy restrictions on employee movement may be less justified.

The UK government is already examining reforms following consultations carried out by its predecessor. The Competition & Markets Authority (CMA) has supported a model that would prohibit non-compete clauses for employees earning below a certain salary threshold and impose statutory limits on their duration for higher earners, aiming to increase labour market flexibility.

While businesses have legitimate interests in safeguarding intellectual property and investments in staff, the debate reflects growing concerns about whether traditional contractual restrictions remain fit for purpose in an economy increasingly driven by innovation and rapid skill turnover. Advocates for reform argue that easing these constraints could spur job creation and help British companies compete globally, while opponents caution that abrupt changes could destabilize firms’ ability to protect valuable assets during critical periods. As the government considers its next steps, the balance between protecting business interests and promoting workforce fluidity remains a central issue for the future of the UK’s tech sector.