End the non-competes! Tech bosses warn ‘unfair’ rules are choking UK growth
Some of Britain’s leading tech founders have called on the government to tear up “unfair” employment restrictions they say are choking growth and leaving UK startups struggling to compete with Silicon Valley.
The bosses of Elevenlabs, Synthesia, Fuse Energy and a string of British AI startups have signed an open letter published on Tuesday demanding restrictions on lengthy notice periods, non-competes and garden leave.
The letter, titled Free to Start and Scale, warns that workers are increasingly “bound by unfair restrictions”, which prevent them switching jobs or starting companies, putting Britain’s technology ambitions at risk.
“UK growth is slow because we can’t build fast enough”, Alan Chang, chief executive and co-founder of Fuse Energy, told City AM.
“Long notice periods, non-competes and garden leave are another barrier to building generational companies here, and they’re dragging on both company growth and GDP”.
The letter has been signed by 22 founders and executives, including Elevenlabs chief executive Mati Staniszewski, Synthesia boss Victor Riparbelli and senior figures at AI startups Recursive Superintelligence, Latent Labs, Metis Reasoning and Inherent Laboratories.
It is also backed by venture investors including Index Ventures, Entrepreneurs First, Plural and Kindred.
The group wants ministers to ban lengthy restrictions imposed after employees leave and curb the use of extended notice periods and garden leave.
The government is already considering reforming non-compete clauses, including options to limit their length or ban them outright.
But the founders warned tackling non-competes alone could push companies towards other ways of preventing staff from leaving.
“Labour mobility is a classic collective action problem”, the letter said, arguing that companies are reluctant to drop restrictions while competitors continue using them.
“These terms lower wages, reduce competition, and undermine the innovation that drives economic growth”.
In July, major UK pension providers committed to exploring a new £1bn-plus Scale-up Fund designed to funnel more domestic capital into high-growth British science and technology companies.
But the founders argue that freeing up investment will only solve part of Britain’s scale-up problem if businesses remain unable to hire talent quickly.
‘You can’t wait 12 months’
Alexandru Voica, head of global affairs at Synthesia, told City AM the problem was particularly acute in AI, where tech and businesses are developing rapidly.
“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”, he said.
“You need to move much faster, typically in weeks or at most a couple of months”.
Voica said lengthy restrictions were also unfair on workers who could find themselves sitting out developments in their industry.
“They have to wait for a year before they can get back to work, which is a very long time to wait in an industry where progress is happening very fast”, he said.
The signatories point to California, where non-compete agreements are generally unenforceable and legislation which took effect in 2024 strengthened restrictions on their use.
Chang said the difference gave Silicon Valley businesses an advantage when competing for workers.
“California doesn’t have this problem. You can hire anyone and have them start in two weeks”, he said. “We need a more liquid labour market to cut that friction and let people build”.
The government has acknowledged that non-competes can restrict workers from moving between employers and potentially hamper competition and innovation. Its latest consultation on reform closed earlier this year.
Voica said employment reform needed to be accompanied by changes to make it easier to attract and retain skilled overseas workers.
“Beyond banning long non-competes, notice periods and garden leaves, we should also look at how we can make it easier for very talented people to come to the UK and keep them here”, he said.
He also criticised uncertainty around potential wealth taxes, arguing that startup employees are often compensated partly with equity that cannot be converted into cash until a company is sold or floats.