Momentum is growing for Australia to follow the US's
and UK's lead in curtailing non-compete clauses.
Non-compete clauses in employment contracts are facing growing
global regulatory scrutiny, with law and policy reform being
considered to ban or limit their use. In the US, the Federal Trade
Commission (FTC) is seeking to combat use of
non-competes against American workers by proposing a rule that
would make non-compete clauses unenforceable. Non-compete clauses
are already banned in a number of US states, including in
California. In the UK, the government has proposed to impose a
statutory limit of three months on non-compete clauses.
In Australia, momentum is gathering to follow the overseas
regulators' lead. Treasury's Competition Taskforce's
review will consider non-compete and related clauses, with an
intent to increase competition and productivity. A consultation
paper is likely to be released in April.
