More than 75 percent of technology companies ask some employees to sign a formal noncompete agreement, according to a recent study by TMP Worldwide Executive Search. Noncompete agreements can be written to prevent employees from working for competitors, soliciting company clients, and/or luring away their coworkers.

The study also found that consultants might be the most likely members of the technology sector to be asked to sign a noncompete.

Download TMP Worldwide’s entire report to gauge how your firm’s use of noncompetes matches up with others in the technology sector. The report provides answers to such questions as:

  • Are noncompete agreements an impediment to recruiting?
  • What kinds of firms use noncompetes?
  • Which job functions are normally covered in noncompete agreements?
  • Are noncompetes an effective means of legal protection?
  • Are noncompetes a useful employee retention device?

More from the TMP Worldwide study…
TMP Worldwide Executive Search is an executive search firm and a division of TMP Worldwide, the firm that created and maintains the Internet career portal The company invited senior human resources executives from technology-oriented businesses to fill out a Web-based questionnaire in April 2001. The participants are segmented by industry and annual sales in Figure A.

Figure A

The results of the study were originally published in June 2001. Here are a few of the findings:

  • The most popular form of noncompete is a general agreement not to work for competitors.
  • Small companies are more likely to require noncompetes than larger ones.
  • Many companies ask even their most junior employees to sign noncompetes.
  • One out of every five companies that uses noncompetes took legal action to enforce them in the last year.

What other legal documents do your employees sign?

Noncompetes are fairly standard in the technology sector, as are nondisclosure agreements. What other legal agreements do your employees—contracted or otherwise—have to sign as a condition of employment? Send us your comments or start a discussion below.