Non-compete clauses trap 28% of UK workers – and it’s dragging down wages
Key Points
- According to the OECD Employment Outlook 2026, 28% of UK workers are bound by non-compete clauses.
- The OECD found these clauses have spread beyond knowledge-intensive jobs, are rising in use, and reduce job mobility, wages, and productivity growth.
- Almost half of surveyed firms were aware of no-poaching or wage-fixing practices in their industry.
More than a quarter of UK workers are bound by non-compete clauses that prevent them from joining or starting a rival firm, according to new data from the OECD.
The finding comes from the OECD Employment Outlook 2026, published on 3 July, which presents the first harmonised cross-country evidence on post-employment restrictions, based on new surveys of employees and employers across 15 OECD countries.
The surveys put the prevalence of non-compete clauses in the UK at 28%, closely in line with the Competition and Markets Authority’s 2024 estimate of 26%.
Across the 15 countries analysed, between one-fifth and one-third of workers are bound by non-compete clauses, while around half of private-sector employees are covered by non-disclosure agreements.
A further one-tenth to one-fifth are subject to clauses banning them from soliciting former clients and colleagues, or requiring them to repay bonuses or training costs if they leave.
The OECD said firms have increased their use of these clauses over the past five years.
Spreading beyond the jobs they were designed for
Non-compete clauses were originally justified as a way to protect trade secrets and other legitimate business interests.
However, the OECD found they have spread well beyond knowledge-intensive occupations to cover large numbers of lower-skilled workers with little or no access to confidential information.
The clauses are also applied indiscriminately, rarely negotiated, and frequently broader in duration and scope than national legal frameworks allow, partly because firms are unaware of the rules.
The consequences, according to the report, are economy-wide. The OECD’s analysis suggests non-compete clauses reduce job mobility, weaken workers’ bargaining power, depress wages, and slow productivity growth by limiting the movement of workers and knowledge between firms.
Even in countries with tighter regulation, the clauses create a throttling effect on job moves because many workers do not know whether they are enforceable.
Illegal no-poaching deals may be widespread
The report also flagged evidence that firm-to-firm agreements restricting competition for staff are more common than previously assumed, despite typically being illegal under competition law.
Almost half of the firms surveyed said they were aware of no-poaching or wage-fixing practices within their industry.
One in six employees reported being blocked from joining another company because of a no-poaching agreement, and a quarter said they had heard of such practices.
The OECD said the pervasiveness of non-compete clauses, combined with the evidence of their harmful effects on wages and productivity, raises questions over whether current policy frameworks are fit for purpose.
It called on governments to rebalance the protection of legitimate business interests against the need to support worker mobility and market dynamism, putting fresh pressure on regulators, including in the UK, where non-competes are governed largely by the courts rather than statute.
