The government is proposing significant changes to the rules governing confidentiality clauses and non-compete agreements for employees. Two proposals stand out: 

1. Restrictions on the use of non-disclosure agreements (NDAs) in cases of workplace harassment and discrimination, and;

2. Limits on non-compete clauses that stop people from joining a competitor after leaving their job.

For employers, these changes could have real, practical consequences.

Non-compete clauses: What’s changing?

A non-compete clause is a term in an employment contract that seeks to prevent someone from working for a competitor or starting a competing business for a period of time after they leave. They are common in senior roles and in industries where employees have access to sensitive commercial information or client relationships.

The government has proposed capping the length of non-compete clauses. At present, these clauses can last anywhere up to twelve months (and occasionally longer), provided a court considers them reasonable. At its core, the proposed reform reflects a growing concern that overly long non-compete clauses do more harm than good, locking talent in place, suppressing competition, and slowing the pace of innovation.

In addition to limiting the duration of these clauses, the government has explored other ways to restrict the use of non-compete provisions. The ideas on the table include:

• Different duration periods for small and large employers;

• A full ban on non-compete clauses;

• Allowing non-compete clauses only for higher-paid roles (using a salary threshold);

• A mix of the above — for example, a salary threshold plus a general time cap.

Other common restrictions, such as non-solicitation clauses (which stop employees from approaching their former clients or colleagues) and confidentiality obligations, do not appear to be affected by these proposals.

For employees, these changes could mean greater freedom to move between roles and industries.

For employers, it will mean thinking more carefully about how to protect their business in other ways, for example by investing in stronger confidentiality clauses, longer notice periods, or garden leave arrangements rather than relying on a lengthy non-compete clause.

Non-Disclosure Agreements – What’s changing?

On April 15th 2026, the government published a consultation on the NDA provisions of the Employment Rights Act 2025 (ERA 2025). The government is proposing to reform the law because it believes NDAs should not be used to cover up workplace misconduct.

The consultation seeks views on:

• When an agreement will amount to an ‘excepted agreement’. In other words, what the situations are when NDAs will still be allowed to be used.

• Who a worker can still talk to even after signing an excepted agreement (i.e. the ‘permitted disclosures’), and;

• Whether these protections should be extended beyond workers to cover other vulnerable individuals.

The ERA 2025 will introduce statutory limits on the use of NDAs in cases involving ‘relevant’ harassment or discrimination.

For conduct to be ‘relevant’, it must involve acts (or alleged acts) by the employer or a fellow worker, and the person signing the NDA must be the affected worker or a colleague. The reference to ‘a colleague’ broadens the scope beyond the individual bound by the NDA. In other words, these rules are not limited to situations in which the individual is personally affected; they also cover conduct that affects other workers in the same workplace. This ensures that wrongdoing will not be shielded by an NDA simply because the individual speaking up was not the direct victim.

Crucially, this also captures third-party harassment, such as where a client or customer is the harasser.

The proposed conditions for ‘excepted agreements’

• Independent advice: The worker must receive written advice from an independent adviser (such as a solicitor) explaining the NDA;

• Worker’s informed choice: After receiving that advice, the worker must confirm in writing that they wish to enter into the NDA;

• Cooling off period:  The NDA must allow the worker to withdraw within 14 days without penalty (The ‘cooling off’ period);

• Written and accessible format: the NDA must be in writing and provided in a clear, accessible format.

• Timing of the incident: The NDA can only cover harassment or discrimination that has already happened (or is alleged to have happened), not future behaviour.

The government’s consultation on this is open until July 8th 2026, and the new rules are expected to come into force in 2027.

Practical Implications for Employers

The proposals may change depending on consultation, but what seems clear so far is that:

• NDAs will become harder to negotiate, and the process will be more of a burden.

• Cooling‑off periods may delay settlements and affect payment timing.

• Excepted agreements may be available, but will offer limited confidentiality.

• Employers may lose the ability to initiate some NDA discussions.

I recommend employers take advice, review contracts, tighten confidentiality and rethink non-competes ahead of the new rules.