Founders of some of Britain's most valuable tech companies have written to the government demanding a ban on lengthy post-termination restrictions, arguing that non-compete clauses, extended notice periods and garden leave are choking start-up growth and pushing hiring toward California.

The open letter, titled Free to Start and Scale, calls on ministers to go beyond the non-compete reforms already under consideration and to also restrict extended notice periods and garden leave — contractual tools the signatories say produce the same damaging effect through different means. The founding signatories include the CEOs of ElevenLabs, a voice AI company valued at $11bn, and Synthesia, which passed the $1bn "unicorn" valuation mark in 2023. Venture capital firms Index Ventures, Entrepreneurs First, Plural and Kindred back the initiative.

What do the founders want changed?

The letter argues that "outdated employment practices" prevent UK start-ups from competing with Silicon Valley counterparts. It frames labour mobility as a "classic collective action problem" in which dominant companies use contractual restrictions to make competing harder.

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

The signatories warn that an outright ban on non-competes alone would not solve the problem, because businesses would simply rely more heavily on long notice periods or garden leave — terms that would still stop UK businesses from scaling up.

"We therefore call on the government to ban lengthy post-termination restrictions and restrict the use of extended notice periods and garden leave. These terms lower wages, reduce competition, and undermine the innovation that drives economic growth," the letter states.

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."

He added: "You need to move much faster, typically in weeks or at most a couple of months."

Where does UK policy stand now?

The intervention lands while the government's own review of non-compete clauses remains unresolved. Last year the Department for Business and Trade published a policy paper setting out options for reform, including a possible outright ban. A consultation on those options closed in February 2026, but no final policy has been announced.

For HR teams, the letter signals how quickly the ground could shift. If ministers adopt the founders' position, employers relying on long notice periods, garden leave or non-compete clauses to protect IP and retain talent would need to rewrite employment contracts, rethink retention strategy and reassess how they handle departing senior staff.

The letter's argument that these terms "lower wages" also puts employers on notice that scrutiny of restrictive covenants is no longer limited to junior contracts or low-paid roles — it now targets the standard toolkit used for engineers, researchers and executives in high-growth companies.

Why the timing matters for employers

The coalition behind the letter combines political weight with commercial credibility. An $11bn company and a 2023 unicorn are not typical campaigners against employment restrictions; their involvement suggests scale-up hiring bottlenecks have become a boardroom-level concern.

That framing changes the debate for people teams. Non-compete reform in the UK has so far focused on whether clauses are enforceable and proportionate. The founders' letter widens the target to notice periods and garden leave — mechanisms many employers treat as routine risk management rather than competition policy.

With the consultation closed since February 2026 and the government yet to respond, the letter applies public pressure at a moment when ministers must choose between a narrow ban and the broader restrictions the founders demand. HR leaders should expect any final policy to force a re-examination of standard senior-hire contracts well beyond the tech sector, and the government's response to this letter may signal which direction that decision is leaning.