Are non-compete clauses enforceable?

Read our latest instalment of our blog series titled ‘Ask a recruiter’, where we share questions we receive about interviews, CVs, the application process and anything our candidates might be concerned or curious about. 

Each week we’ll be answering one question that comes up in conversation with candidates; this week’s being about non-compete clauses.

A VAT Director from London asks: ‘Are non-compete clauses enforceable?’

Yes, no, maybe. The short answer is that it depends on what you’ve signed and how restrictive it is.

Non-competes (NCs) are generally used since employers are looking to protect practices and internal data against the loss of their employees going to new organisations. In 2016, the UK government’s Department for Business Innovation & Skills released a paper regarding non-compete clauses. Here’s a summary of what they feel NCs tend to include:

• ‘Restrictions to an ex-workers ability to work for a competing business, including one they establish themselves
• Restrictions which prevent an ex-worker from having dealings with the employer’s customers or clients
• Restrictions preventing an ex-worker from hiring workers of the former employer
• Restricting a worker from setting up a business in a geographical location that would disadvantage their ex-employer

Now, employment law in the UK is a colossal maze; one of which I’m not qualified to advise or comment on in any shape or form. However, from experience in the world of recruitment, NCs are a common headache that can make or break job opportunities. The problem is; exactly how restrictive is the non-compete?

The three key issues surrounding this are:

1. Legitimate interest – is the rationale from the NC imposer legitimately necessary?
2. Reasonable restrictions – for how long and in which locations are the NC applicable?
3. Consumer protection – does the NC affect the wider public that your business/expertise has served?

From my experiences in the world of indirect tax, reasonable restrictions have been the common theme preventing professionals from relevant positions. Often or not, the NCs I’ve seen have been referred to by legal counsels as too restrictive and therefore, unenforceable. It’s the murky waters of ‘Are you being unfairly prevented from the right to work’?

Really, this blog aims to make you aware of non-compete clauses and implore you to seek advice from Employment Law Solicitors. The answer is not as simple as yes or no, as it very much depends on the content of the NC.

If you’d like independent legal advice on non-competes, we will be happy to refer you to a recommended Employment Solicitor.

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