When Bank of Scotland owner Lloyds named Charlie Nunn as its new chief executive in December, the group highlighted the fact that his notice period and non-competition obligations with his current employers at HSBC meant it would be up to a year before he could take the helm.

Such restrictions are standard in the top flight of business, and understandably so. But they are also quite common throughout the lower ranks of many industries in the UK, at times with less discernible benefit.

Prompted by concerns that the current use of non-compete clauses is frustrating workers who want to leave and set up their own business, the Government is once again looking at the possibility of limiting the use of these restrictions. The primary aim seems to be a desire to promote entrepreneurial activity in the tech sector, thus assisting economic recovery from the Covid pandemic.

But it’s not only tech experts and C-suite executives that get caught in the net of non-competition restrictions.

HeraldScotland: It could be 12 months before Charlie Nunn can take up his new post as head of Lloyds Banking GroupIt could be 12 months before Charlie Nunn can take up his new post as head of Lloyds Banking Group

“I am ashamed to say that I only discovered I had a non-compete clause in my contract when I resigned and my boss raised the issue,” said one senior employee from a professional services firm in Scotland. “However, in my defence, none of my colleagues realised they have the same clause in their contract too, which does raise the question that the wording is deliberately vague to avoid anyone raising concerns.

“In my own situation, my boss decided not to enforce the clause so I never had to test it out in court, although I would have done so. My guess is that he knows this is shaky ground, legally.

“The experience has definitely affected my relationship with my former employer as the clause appears designed to make it very difficult to leave. I was lucky to avoid a court case, but others may be less fortunate.”

Non-compete clauses often stop departing employees from working for competitors, starting a rival business or working with former clients, usually for many months after they leave. Morag Hutchison, partner in employment at Burness Paull, said the use of these restrictive covenants has become routine for those in business development and client-facing roles.

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“I would say it is common to see them in contracts of employment, particularly in middle management and senior management,” she said. “Whether they are enforceable or not is another matter.”

The current consultation is being led by the Department for Business, Energy & Industrial Strategy (BEIS), with the call for evidence closing on Friday. Among the options being explored are: mandatory compensation payments to employees during the term of non-compete clauses; additional transparency measures to ensure employees are aware of restrictions; introducing maximum limits on the term of non-compete clauses; or an outright ban on post-termination competition restrictions.

In 2016, BEIS published the outcome of similar consultation into non-compete clauses in which it concluded: “Common law has developed in this area for over a century and is generally acknowledged to work well. Having built up a picture of the UK experience via this call for evidence, we have decided it is not necessary to take any further action at this stage.”

Ms Hutchison is among others who find it interesting that the issue has raised its head once again, particularly in the context of spurring entrepreneurial activity.

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“I feel like it is tinkering around the edges, to be honest,” she said. “Restrictive covenants are a consideration, but they are not a show-stopper.”

There are no guarantees that any changes to the law will be forthcoming, and as the consultation itself is part of a much longer process, any alterations will come a fair bit further down the line. However, experts note that the Government has made clear its willingness to make significant strides away from the current position on non-competes.

“The finance sector would certainly be impacted, as well as new-start and established technology companies,” Ms Hutchison said. “The recruitment industry is another one where post-termination restrictions are quite common, and people such as hairdressers would be affected.

“Really, you’re probably talking about just about any kind of customer-facing role.”