Employment Contract

Understand what your employment contract really says before you sign.

See What You're Missing in Your Employment Contract

An employment contract defines the relationship between you and your employer -- your role, compensation, benefits, and the rules that govern what happens when the relationship ends. While getting a job offer is exciting, the contract you sign can shape your career for years after you leave that position.

Many employment contracts contain clauses that restrict your future options: non-competes that limit where you can work next, IP assignments that give the company ownership of your side projects, and arbitration clauses that waive your right to sue. Understanding these terms before you sign gives you the chance to negotiate or at least make an informed decision. This is informational, not legal advice.

Key Risks to Watch For

Broad Non-Compete Clauses

A non-compete that restricts you from working in your entire industry for two years after leaving can effectively freeze your career. Check the geographic scope, duration, and how broadly competitors are defined.

Intellectual Property Assignment

Many employment contracts include IP assignment clauses that give the employer ownership of anything you create during employment, sometimes including side projects or work done on your own time. Look for language that limits the assignment to work related to the company's business.

At-Will Employment with Restrictive Covenants

If your contract says the employer can terminate you at will, but you are still bound by non-compete and non-solicitation clauses after termination, the deal is lopsided. You can be let go for any reason but still face career restrictions.

Mandatory Arbitration

Arbitration clauses require you to resolve disputes through private arbitration rather than the court system. This can limit your legal options and typically favors the employer, especially if they choose the arbitration provider.

Vague Termination Provisions

If the contract does not clearly define what constitutes cause for termination, or if severance terms are absent, you may have less protection than you think. Clear termination and severance language is worth negotiating upfront.

Related Contract Clauses

Learn more about specific clauses commonly found in employment contracts:

Non-Compete Clause Non-Solicitation Clause At-Will Employment Clause Intellectual Property Assignment Confidentiality / NDA Clause Arbitration Clause Severance Clause Probationary Period Clause Non-Disparagement Clause Garden Leave Clause

Frequently Asked Questions

What is an employment contract?

An employment contract is a legal agreement between an employer and an employee that outlines the terms of employment, including job responsibilities, compensation, benefits, termination conditions, and any restrictive covenants like non-compete or confidentiality agreements.

What should I look for in an employment contract?

Focus on compensation and benefits, the job description and reporting structure, termination provisions (including what counts as cause), any restrictive covenants (non-compete, non-solicitation, confidentiality), IP assignment clauses, and dispute resolution mechanisms like mandatory arbitration.

Can I negotiate an employment contract?

Yes, employment contracts are negotiable. Common negotiation points include salary, benefits, start date, remote work flexibility, non-compete scope and duration, IP assignment carve-outs for personal projects, and severance terms. The best time to negotiate is after receiving the offer but before signing.

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