A group of UK technology founders and investors is calling on the government to restrict the use of non-compete clauses, arguing that lengthy employment restrictions are making it harder for experienced workers to leave established companies and build startups of their own.
More than 20 figures from Britain’s technology industry have backed the intervention, including people associated with companies such as ElevenLabs and Synthesia.
At the centre of the debate are non-compete clauses, contractual restrictions that can prevent employees from joining a competitor or starting a competing business for a period after leaving their job.
Supporters of reform argue that while companies have legitimate reasons to protect confidential information and intellectual property, broad restrictions can also limit how easily experienced employees move between companies or become founders.
That matters particularly in technology, where new companies are often started by people leaving larger businesses with years of industry experience.
Teddy Collins, founder of Inherent Laboratories, told the Financial Times that a 12-month non-compete linked to his previous role at Google DeepMind delayed the launch of his startup.
The founders pushing for reform want the government to look at both non-compete clauses and lengthy notice periods that can keep employees tied to their existing employers.
More than a quarter of UK workers are estimated to be covered by some form of non-compete agreement, although whether an individual clause can be enforced depends on its circumstances.
Why tech founders want the rules changed
The dispute comes as the UK government looks for ways to encourage more technology companies to start and scale in Britain.
For the founders supporting reform, there is a tension between that ambition and employment contracts that can leave experienced technology workers waiting months before they can build or join another company.
The debate is particularly relevant in sectors such as artificial intelligence, fintech and deeptech, where specialist expertise is concentrated among a relatively small number of companies.
It also raises a practical question for international technology workers building careers in the UK.
Workers whose right to remain in Britain is tied to employer sponsorship can already face additional considerations when changing jobs or starting a company. A restrictive employment contract can add another layer to that decision, although the immigration and contractual implications will depend on an individual’s circumstances.
The government has not yet committed to the changes being sought by the technology leaders.
But the intervention adds another dimension to the UK’s wider attempt to make Britain a more attractive place to build technology companies.
Access to capital and talent remain important parts of that discussion. The founders behind the latest intervention argue that what employees are allowed to do when they leave an established company matters too.
For aspiring founders working inside Britain’s technology companies, any change could ultimately affect how quickly they can move from employee to entrepreneur.
