The government has recently said it will legislate to restrict non-compete clauses, so they stop acting as a barrier to people joining rivals or setting up their own businesses. The detail is not yet published. The options under consideration range from an outright ban to statutory duration caps, salary thresholds, and limits linked to company size. Notice periods, garden leave, and non-solicitation and non-dealing covenants are also in scope.
For UK real estate, this matters. Senior investment, asset management and development professionals often sit under long restrictive covenants. In a sector where client relationships and deal pipelines are the asset, employers have good reason to protect them. Any reform that shortens those restrictions would make it easier to move between advisers, REITs, developers, fund managers and private equity. Candidates would have more options, and firms able to move quickly would gain ground.
It cuts both ways. Employers who rely on long garden leave to protect a client book will need other tools, such as deferred incentives and tighter retention terms. Non-solicitation will need particular attention, because in a relationship-led market it is often the protection that counts most.
If you would like to discuss this further please reach out to Tom McNally.