Tech founders urge UK government to ban post-termination curbs

Founders of UK tech companies worth a combined $12bn-plus, including voice AI firm ElevenLabs valued at $11bn, have written to the government demanding a ban on lengthy post-termination restrictions that they say stop British start-ups competing with Silicon Valley.

The open letter, titled Free to Start and Scale, calls on ministers to scrap non-compete clauses, extended notice periods and garden leave — describing them as "outdated employment practices" that suppress wages and slow hiring.

What do the founders want changed?

The signatories want three specific reforms:

• A ban on lengthy post-termination restrictions, including non-compete clauses
• Tighter limits on extended notice periods
• Restrictions on the use of garden leave

The letter argues that labour mobility is a "classic collective action problem" in which dominant companies use contractual restrictions to make competing harder for newer entrants.

"In California, workers can start or join new companies overnight," the letter states. "If it is easier for companies to hire in California, they will hire in California."

Who is behind the campaign?

Founding signatories include the CEOs of ElevenLabs, valued at $11bn, and Synthesia, which reached unicorn status — a valuation above $1bn — in 2023. Venture capital firms Index Ventures, Entrepreneurs First, Plural and Kindred also back the initiative.

Alexandru Voica, head of global affairs at Synthesia, told City AM: "If you are a company in need of engineers or researchers or if you're a founder with a big idea, you can't wait 12 months to hire someone. You need to move much faster, typically in weeks or at most a couple of months."

What is the government doing?

The Department for Business and Trade published a policy paper last year setting out options for reforming non-compete clauses, including a possible outright ban. A consultation on those options closed in February 2026, but the government has not yet announced a final policy.

The founders warn that a ban on non-competes alone would not solve the problem. Businesses could simply lean harder on long notice periods and garden leave, which would still prevent UK companies from scaling.

"These terms lower wages, reduce competition, and undermine the innovation that drives economic growth," the letter states. "We urgently need to set a new norm."

What does this mean for tech workers?

For engineers, researchers and founders in the UK, the outcome directly affects how quickly they can move between employers. A hire that takes weeks in California can currently take up to 12 months in Britain once notice periods and post-termination restrictions run their course. Workers under such clauses also face weaker leverage on pay, according to the letter's argument that the restrictions hold down wages.

The government's response to the consultation, when it comes, will determine whether UK mobility rules converge with California's model or remain closer to current practice.