CMA Advocates Non-Compete Clause Reform and Salary Threshold Ban

UK CMA Publications

Published February 25th, 2026

Detected February 26th, 2026

Summary

The UK's Competition and Markets Authority (CMA) has responded to a government working paper on reforming non-compete clauses in employment contracts. The CMA advocates for reforms, including a ban on non-competes below a salary threshold, to enhance labour market mobility.

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What changed

The Competition and Markets Authority (CMA) has issued a formal response advocating for significant reforms to non-compete clauses in UK employment contracts. The response, submitted to the Department for Business and Trade (DBT), argues that current restrictions hinder labour market mobility and economic growth. Notably, the CMA endorses a ban on non-compete clauses for employees below a specified salary threshold, coupled with a statutory limit on the duration of clauses for those above the threshold.

This guidance signals a strong push for legislative change that will directly impact employers' ability to restrict employee movement. Companies should review their current non-compete agreements and prepare for potential legislative changes that could render many of them unenforceable or require significant amendment. While this is a response to a working paper and not yet a final rule, the CMA's endorsement suggests a high likelihood of future regulatory action, necessitating proactive compliance planning.

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Correspondence

CMA response to working paper on options for reform of non-compete clauses in employment contracts

The Competition and Markets Authority (CMA) has responded to the Department for Business and Trade (DBT) working paper on options for reform of non-compete clauses in employment contracts.

From: Competition and Markets Authority Published 25 February 2026 Get emails about this page

Documents

CMA response to working paper on options for reform of non-compete clauses in employment contracts

PDF, 226 KB, 6 pages

Details

The CMA has responded to DBT’s working paper on options for reform of non-compete clauses in employment contracts.

Our response set outs the case for reform to the current legal framework, noting the importance of labour market mobility to economic growth. It draws on our report on competition and market power in UK labour markets, and other evidence on the relationship between non-competes and labour market mobility.

Additionally, it provides views on the options to restrict the use of non-competes and endorses a ban on non-competes below a salary threshold with a statutory limit on length above the salary threshold as a balanced approach.

For questions about the CMA’s response, email the CMA advocacy team at advocacy@cma.gov.uk