Law

Before You Sign: What to Look for in an Employment Contract

Updated Jan 29, 2024 5 min read

Written by

Law Editorial Team

A person holding a pen over an employment contract on a desk, preparing to sign

In This Article

Key Takeaways

  • Employment contracts can restrict your rights—sometimes for years—so careful review is essential before signing.
  • Non-compete, non-solicitation, and arbitration clauses deserve especially close attention and vary significantly by state.
  • Compensation terms, termination provisions, and IP ownership clauses are among the most consequential sections.
  • You have the right to ask questions, request clarifications, or negotiate terms before accepting an offer.
  • An employment attorney can review complex contracts for a relatively modest fee and may save you significant trouble later.
20–40 min

Summary

18 items · 20–40 minutes

Why Employment Contracts Deserve More Than a Quick Skim

Most people spend more time reading a streaming service's terms than the contract governing their livelihood. Employment contracts often contain clauses that quietly limit your ability to change jobs, claim compensation, or pursue legal remedies—sometimes for years after you leave.

Before you sign, understand that certain provisions are negotiable, others vary dramatically by state, and a few can be contested in court. This checklist walks you through each critical area. For a broader foundation, see Employment Rights Every Worker Should Know—it covers federal baseline protections that no contract can eliminate.

Verbal Promises Are Not Legally Binding

If a recruiter or hiring manager makes commitments—about remote work flexibility, promotion timelines, or signing bonuses—that do not appear in the written contract, those promises are generally unenforceable. Courts typically apply the parol evidence rule, which limits what outside statements can be used to interpret or modify a signed written agreement. Always insist that material promises be incorporated into the contract itself before you sign.

What You'll Need to Review the Contract

Gathering the right resources before you sit down with the document makes the review more efficient and thorough.

Required

A printed or editable copy of the full contract

Allows you to annotate, highlight, and flag clauses systematically without missing pages.

Required

Your state's department of labor website

Confirms which state-specific rules apply to wage payment, non-competes, and at-will exceptions in your jurisdiction.

Optional

An employment attorney

Provides professional review of complex or unusual clauses, particularly arbitration, IP, and non-compete provisions.

Required

A written record of verbal promises

Documents any oral commitments made during negotiations so you can request they be incorporated into the written agreement.

The Full Employment Contract Checklist

Work through each group systematically. Flag any clause you don't fully understand—ambiguity in a contract tends to generate disputes, not resolve them.

Compensation and Benefits

Confirm that base salary, pay frequency, and payment method are stated explicitly—never rely on verbal assurances alone. Must
Review bonus and commission structures: check whether they are discretionary or guaranteed, and what triggers payment. Must
Verify that equity, stock options, or profit-sharing terms—including vesting schedules and cliff periods—are written into the contract. Must
Check benefits coverage start dates, waiting periods, and any employer contribution commitments. Should

Job Role and Duties

Confirm that your title, reporting structure, and core responsibilities are described with enough specificity to prevent unilateral reassignment. Must
Look for language allowing the employer to change your duties, location, or hours without notice or consent—this can be negotiated. Should
Check whether remote-work arrangements or flexible scheduling are documented rather than assumed. Nice to have

Termination and Severance

Identify whether the contract is at-will, fixed-term, or for-cause—each carries different job security implications. Must
Review any severance provisions, including what triggers them and whether they require you to sign a release of claims. Must
Check for notice requirements: how much notice must the employer give you, and how much must you give them? Should

Restrictive Covenants

Identify any non-compete clause and note its geographic scope, duration, and the industries or roles it covers—these terms determine enforceability. Must
Review non-solicitation clauses for both clients and former colleagues; understand what contact is restricted and for how long. Must
Confirm whether garden-leave pay is provided during any restrictive period—some states require compensation for enforced non-competes. Should

Intellectual Property and Confidentiality

Determine which inventions or work product the employer claims ownership of—particularly whether it extends to work created on personal time. Must
Review the confidentiality clause's scope and duration; ask whether it covers publicly available information, which could be unenforceable. Must
Check for any moonlighting restrictions that could prevent you from freelancing or pursuing side projects. Should

Dispute Resolution

Locate any mandatory arbitration clause and assess what claims it covers, which rules govern the process, and who pays the costs. Must
Note the governing law and venue provisions—these determine which state's laws apply and where any dispute must be resolved. Must
Check for class-action waivers, which prevent you from joining collective legal actions against the employer. Should

Don't Let a Deadline Rush Your Review

Employers sometimes apply informal pressure to sign quickly. In most situations, requesting two to five business days to review a contract is reasonable and professionally appropriate. A legitimate employer will rarely rescind an offer solely because you asked for time to read it carefully. If significant pressure is applied to sign immediately, that itself is worth noting.

Clauses That Deserve Special Caution

Non-compete agreements are among the most misunderstood provisions workers encounter. Many employees assume these clauses are automatically enforceable, but non-compete enforceability varies widely by state and circumstance. Some states—including California, North Dakota, and Minnesota—generally refuse to enforce them at all.

Arbitration clauses are another area deserving careful thought. By agreeing to mandatory arbitration, you may be waiving your right to a jury trial and limiting discovery rights if a dispute arises. Learn more about what you give up when you sign an arbitration clause before accepting this provision without question.

Termination provisions interact directly with your state's at-will employment rules. If your contract specifies a term of employment or lists grounds for termination, it may override the default at-will relationship. Understanding the distinction matters: see how at-will employment differs from just-cause protections for a practical comparison.

This article provides general legal information for educational purposes only and does not constitute legal advice. Employment law varies by state and individual circumstance. Consult a licensed employment attorney for guidance specific to your situation.

Law Editorial Team is the collective byline for our editorial team and contributor network. Articles published under this byline or an editorial pen name are researched, written, and reviewed according to our editorial standards for clarity, consistency, and independence before publication.

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