Tech founders urge ministers to curb garden leave as well as non-competes
An open letter from AI startup bosses, backed by venture investors, says banning non-competes alone risks pushing employers onto long notice periods and garden leave, and asks the government to restrict those too
- Founding signatories include the CEOs of ElevenLabs, Synthesia and Latent Labs and a co-founder of Recursive Superintelligence
- Supporting firms include Index Ventures, Balderton Capital, Atomico, Entrepreneurs First, Plural and Kindred Capital
- DBT’s working paper cites estimates that some 5 million workers in Great Britain are bound by a non-compete, usually for about six months
- In May 2023 the previous government promised a three-month cap on non-competes; the working paper says no action was taken
The letter shows the contest for scarce AI researchers and engineers moving past the non-compete to the notice and garden-leave terms that keep a new hire waiting. If ministers take up the wider ask, long notice and paid garden leave could stop working as retention tools for senior technical staff, leaving UK tech employers to hold people with pay, equity and the work itself. Contracts that lean on those clauses are worth reviewing before any rule change.
“Labour mobility is a classic collective action problem.”Free to Start and Scale open letter
A group of 22 founders and executives, most of them from AI startups, published an open letter on 29 September asking the government to outlaw long post-employment restraints on staff and to cap notice periods and the use of garden leave. Ten investors are listed as supporters, and by 1 October the page listed 34 further names, among them Yann LeCun, executive chairman of AMI Labs.
The founders welcome a non-compete ban but expect employers to shift the same protection into other clauses, defeating the point of reform. Their wider case is competitive: the letter compares the UK with California, where it says people can move to a new company, or found one, overnight, and argues that hiring goes where moving is easiest.
What ministers are weighing
The Department for Business and Trade (DBT) issued a working paper on non-compete reform in November 2025. It set out four options: a statutory cap on length, an outright ban, a ban for workers earning under a set salary, or that ban combined with a cap for higher earners. Responses closed in February 2026, and DBT described the paper as a basis for discussion rather than a formal consultation.
The paper anticipated part of the founders’ concern. It warned that a ban could lead some employers to lean harder on other restrictive covenants, and it listed garden leave, where the worker is still paid, as one of the ways workers could benefit. None of its four options deals with notice periods.
Alan Chang, chief executive of Fuse Energy and a signatory, told City AM that “long notice periods, non-competes and garden leave are another barrier” to building generational companies in the UK.
Sources
- Free to Start and Scale, “Free to Start and Scale”, open letter, 29 September 2026. https://freetostartandscale.uk/
- Department for Business and Trade, “Working paper on options for reform of non-compete clauses in employment contracts”, 26 November 2025. https://www.gov.uk/government/publications/reform-of-non-compete-clauses-in-employment-contracts-working-paper/working-paper-on-options-for-reform-of-non-compete-clauses-in-employment-contracts
- Department for Business and Trade, “Reform of non-compete clauses in employment contracts: working paper”, 26 November 2025. https://www.gov.uk/government/publications/reform-of-non-compete-clauses-in-employment-contracts-working-paper
- City AM, “End the non-competes! Tech bosses warn ‘unfair’ rules are choking UK growth”, 29 September 2026. https://www.cityam.com/end-the-non-competes-tech-bosses-warn-unfair-rules-are-choking-uk-growth/
