When energy startup Fuse recruited Greg Wilk as its chief technology officer, it found the person it needed. Getting him to start was another matter. Wilk was originally bound by an 18-month non-compete clause. That was reduced to six months of paid gardening leave before he could join Fuse, according to the Financial Times. Fuse co-founder Alan Chang believes the delay held back the business — had Wilk joined earlier, he suggested, the company might have entered four markets rather than two.
Non-competes restrict the work people can take after leaving an employer. Gardening leave keeps them employed and paid during their notice period. Both can leave a growing firm waiting months for a senior hire.
In October, UK prime minister Andy Burnham pledged to reform non-competes. The Budget later confirmed that changes would apply across the economy, with detailed proposals expected in early 2027.
The cost of waiting
In Great Britain, about 5 million employees are covered by non-compete clauses, according to government estimates.
A survey of 423 scale-up leaders by Enterprise Britain found that 87% considered non-competes an obstacle to hiring. Another 42% had abandoned a potential hire because of either a non-compete agreement or a lengthy notice period.
Nils Richter, managing partner at executive search firm KennedyFitch, puts it simply.
“Sometimes the challenge is not finding the right leader, but whether that person can actually make the move,” he says, adding that hiring across borders can be more complicated because the rules differ between countries.
“Non-competes are more common in large and multinational companies, so the experienced workers a scale-up most wants to hire are often the ones tied by an incumbent’s clause,” said Andrea Garnero, a senior economist at the OECD who led its research on the subject.
An OECD study found that a 10-percentage-point higher share of workers covered by non-competes was associated with roughly 1.9% lower business-sector labour productivity. This finding covers several countries. It is neither a UK-specific estimate nor proof that non-competes caused the decline. Some workers are deterred even when the restriction may not hold up in court.
“Even clauses a UK court would probably not uphold can deter a move,” Gamero says, “because many workers don’t know whether their clause is enforceable, and testing it in court is costly.”
Keeping business secrets safe
Employers have their own concerns. Senior staff can leave with knowledge of confidential plans, client relationships and other information a competitor might value.
Shazia Ejaz, director of campaigns at the Recruitment and Employment Confederation, warns that employers may invest less in training if they cannot protect their interests. “If businesses cannot protect that investment,” she says, “many will think twice before committing resources to training and workforce development.”
Richter agrees that companies need safeguards, but there must be limits. “Companies have every right to protect their confidential information and commercial interests,” he says. “But there is a difference between protecting a business and unnecessarily restricting an executive’s ability to apply the expertise they have built throughout their career.”
Richter advises employers to consider how long a restriction lasts, what it covers and whether narrower measures would protect the business just as well. Garnero points to protections already in place.
“Confidential information is the interest employers most often cite. It is already protected by confidentiality agreements and by trade secret law,” he says. “The question is whether non-competes add much on top.”
He accepts that a few senior or highly specialised roles may need more protection when the employee’s expertise is difficult to separate from confidential business knowledge. Countries have taken different approaches, from banning non-competes for lower-paid workers to limiting their duration or requiring employers to pay people during the restricted period.
“Paying the worker forces employers to ask whether the clause is really worth it,” Garnero says. He also wants the rules to apply to employers of every size. “Whatever option the UK chooses, the rules should apply to all employers, since the clauses that hold back start-ups are mostly written by the firms they hire from.”
Richter argues that businesses should also give executives reasons to stay, through good leadership, opportunities to develop and a workplace they want to be part of.
The government plans to set out its position in early 2027. Until then, a firm can secure its preferred candidate and still face months of waiting before that person can start.
When energy startup Fuse recruited Greg Wilk as its chief technology officer, it found the person it needed. Getting him to start was another matter. Wilk was originally bound by an 18-month non-compete clause. That was reduced to six months of paid gardening leave before he could join Fuse, according to the Financial Times. Fuse co-founder Alan Chang believes the delay held back the business — had Wilk joined earlier, he suggested, the company might have entered four markets rather than two.
Non-competes restrict the work people can take after leaving an employer. Gardening leave keeps them employed and paid during their notice period. Both can leave a growing firm waiting months for a senior hire.
In October, UK prime minister Andy Burnham pledged to reform non-competes. The Budget later confirmed that changes would apply across the economy, with detailed proposals expected in early 2027.
