1. Overly Broad Non-Compete Clauses
A non-compete that bans you from working for 'any competitor anywhere in the world for 3 years' is likely unenforceable but still intimidating. Watch for geographic scope that's broader than your employer's actual market, duration beyond 1-2 years, and definitions of 'competitor' so broad they'd cover unrelated industries. Many jurisdictions are restricting or banning non-competes entirely — know your local laws.
2. Aggressive IP Assignment
Most employment contracts require you to assign all work-related inventions to the employer. That's standard. But some go further, claiming ownership of everything you create — even on your own time with your own equipment. Look for carve-outs that protect your personal projects. California and several other states have laws limiting employer IP claims on employee side projects.
3. At-Will vs. Fixed Term Confusion
Make sure the 'at-will' language is clear and consistent. Some contracts mix at-will language with fixed-term provisions, creating legal ambiguity. If the contract says your employment is at-will but also references a 'one-year term,' clarify which applies.
4. Vague or Conditional Compensation
Bonus and commission language should be specific. 'Eligible for a discretionary bonus' gives the employer complete freedom to pay nothing. Ideally, bonuses should have objective criteria. Commission structures should clearly define when a commission is 'earned' and payable, especially if you leave the company.
5. One-Sided Termination Provisions
Some contracts allow the employer to terminate without notice while requiring you to give 30, 60, or 90 days notice. Look for symmetry — if they can fire you immediately, you should be able to resign immediately. Severance provisions should also be clear and fair.
6. Mandatory Arbitration Waiving Class Action Rights
Many employment contracts include mandatory arbitration clauses that prevent you from suing in court and waive your right to participate in class actions. While arbitration can be faster, it limits discovery, appeal rights, and your ability to band together with other employees. This has been a heavily litigated issue — know what you're giving up.
How to Protect Yourself
Always get an employment contract in writing and review it carefully before signing. Use ContractRev to scan your offer letter or employment agreement for these red flags — our AI flags non-compete overreach, one-sided IP clauses, and other common issues in seconds.
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