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UK Competition Authority Targets Non-Compete Clauses in Landmark Move

Financial Times Companies •
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UK competition watchdog the Competition and Markets Authority (CMA) has proposed banning non-compete clauses for low-paid staff while capping them for high earners, marking a significant regulatory shift aimed at boosting worker mobility and competition. This move responds to concerns that restrictive employment terms stifle innovation and limit career opportunities, particularly for those in lower-wage roles. The CMA argues these clauses unfairly prevent workers from seeking better-paying jobs or starting new businesses, thereby reducing labor market dynamism. The proposed rules would apply to workers earning less than £30,000 annually, with high earners facing maximum two-year non-compete restrictions after leaving a company. This represents the most substantial overhaul of UK employment contract rules in decades, potentially reshaping hiring practices across sectors like retail, hospitality, and tech.