What Are the Alternatives to Non-Compete Restrictions?

In an article for HR Magazine, labor and employment partner Alex Denny, counsel Emma Vennesson, associates Charlotte Marshall and Kristin Halsing, and trainee solicitor Fred Kelleher share alternative strategies businesses can use to protect their interests if a ban is imposed on non-compete restrictions. They focus on the U.K. and California, where non-compete restrictions are already banned.

The authors describe how, in Dec. 2020, the U.K. government launched a consultation on reforming post-termination non-compete restrictions to encourage more competition in the employment market.

If non-compete restrictions are banned, the authors recommend placing an employee on gardening leave during their notice period or arranging deferred remuneration. They also consider California’s alternatives to non-compete restrictions, such as confidentiality agreements or damages aimed at compensating a business for the loss incurred by an unfair act.

In conclusion, the authors state, “The U.K. consultation is the first step in what is likely to be a long process, and businesses will likely be keeping a close eye on developments.”