How to Review an Employment Contract Before Signing (Without a Lawyer)

Start Here: The 30-Second Sanity Check

Before diving into the details, do a quick gut check. Open your employment contract and look for these three things:

• Does the job title and description match what you interviewed for? If the contract says 'duties as assigned by management' and you applied for a specific engineering role, that's a red flag.
• Is the compensation exactly what you agreed to? Not a range, not 'subject to board approval,' not 'discretionary.' A fixed, unambiguous number.
• Is there anything you didn't discuss in the interview? Non-compete clauses, mandatory arbitration, IP assignment of personal projects — if it wasn't mentioned during hiring and it sounds restrictive, it needs review.

Step 1: Compensation & Benefits — Is the Money Real?

This is the section you'll be tempted to skip because you already know your salary. Don't skip it. What you agreed to verbally and what's in writing can be different — and only the writing matters.

What to check:

• Base salary: should be stated as a fixed annual or hourly amount. If it says 'salary range: $X–$Y,' clarify which number applies to you.
• Bonus: look for the word 'discretionary' — that means the employer can pay zero even if you and the company hit every target. Push for objective criteria: 'target bonus of X% based on company and individual performance metrics.'
• Equity: check the grant size (number of shares or options), vesting schedule (standard: 4 years with 1-year cliff), exercise window (90 days post-termination is standard but tight — 10 years is ideal), and whether you get acceleration on termination or change of control.
• Commission: if you're in sales, the contract must define when commission is 'earned' vs. 'payable.' The difference matters if you leave — you want commissions on deals you closed to be owed even after departure.
• Benefits reference: the contract should reference actual benefit plan documents. 'Eligible for standard company benefits' without specifying what those are is meaningless. Ask for the benefits summary.

Step 2: Restrictive Covenants — What You Can't Do After You Leave

Restrictive covenants are the clauses that follow you out the door. They limit what jobs you can take, who you can work with, and who you can hire. This is where self-review pays off — because no one else will catch these for you.

• Non-compete: the big one. Check geographic scope (a 50-mile radius around your office is reasonable; 'worldwide' is not), duration (6–12 months is standard; 2+ years is excessive), and industry breadth ('any company that develops software' covers everything — push for a list of named competitors). Note: non-competes are banned or heavily restricted in California, Colorado, Oregon, Washington D.C., and several other jurisdictions. Know your local law.
• Non-solicitation of customers: standard for sales and client-facing roles. Check duration (12 months is typical) and scope (should be limited to customers you actually worked with, not every customer the company ever had).
• Non-solicitation of employees: bans you from recruiting former colleagues. Standard for management roles. Check if it applies to people who reach out to you first — if so, it's overbroad.
• Non-disparagement: bans you from saying negative things about the company. Increasingly common. Check if it's mutual — if you can't badmouth them, they shouldn't badmouth you either.
• Moonlighting / outside activities: bans freelancing, consulting, or side projects while employed. If you have a side business or plan to, negotiate a carve-out. At minimum, exclude activities outside company business hours using your own equipment.

Step 3: IP Assignment — Who Owns Your Work?

The IP assignment clause determines who owns what you create. It's standard for employers to own work you do for them. It's not standard for them to own everything you create — including on weekends, on your own laptop, on completely unrelated projects.

What to look for:

• Scope: should be limited to inventions 'related to the company's business' or 'created using company resources.' If it covers 'all inventions conceived during the employment period regardless of subject matter,' that's overbroad.
• Carve-outs: the contract should explicitly exclude inventions you created before joining (list them in an exhibit) and inventions unrelated to company business created on your own time with your own equipment. Several states — including California (Labor Code § 2870), Illinois, and Washington — mandate these carve-outs by law.
• Moral rights waiver: if you're in a creative field, check for a waiver of 'moral rights' — this means the company can modify your work without attribution. Standard in employment but worth knowing about.
• Disclosure obligation: many contracts require you to disclose all inventions, even personal ones, so the company can determine whether they claim ownership. Combined with a broad scope, this creates a risk: you disclose a side project, the company claims it, and you have to fight.

Step 4: Termination Provisions — How You Can Leave (And Be Let Go)

Termination clauses define the end game. They determine whether you walk away clean or spend months in limbo.

• At-will employment: the default in most U.S. states. Either party can end the relationship at any time, for any lawful reason, with no notice. Confirm the language is clear. If the contract says 'at-will' but also references a fixed term or 'just cause' termination, it's ambiguous — get it clarified.
• Notice period: if the contract requires you to give notice (30/60/90 days), check if it's mutual. The employer should give the same notice or pay in lieu. One-sided notice — you owe 60 days, they owe zero — is a red flag.
• Termination for cause: should define specific grounds (fraud, felony conviction, willful misconduct, material breach). A vague definition ('any reason the company deems sufficient') is not acceptable — it lets them fire you 'for cause' and deny severance arbitrarily.
• Good reason resignation: if you're negotiating an executive contract, push for a 'good reason' clause — you can resign and still get severance if the company reduces your pay, demotes you, or relocates you without consent.
• Severance: what you get if terminated without cause. Standard is 1–2 weeks per year of service, but it's negotiable. Check if severance requires signing a release of claims — it almost always does — and whether the release covers age discrimination claims (which have special requirements under the OWBPA).

Step 5: Dispute Resolution & Fine Print

The last few pages of your employment contract contain the dispute resolution provisions. Most people skip these. Don't — they determine what happens if something goes wrong.

• Arbitration vs. court: an arbitration clause means you can't sue in court. Arbitration is faster and cheaper for small disputes but limits discovery, appeal rights, and public record. If there's an arbitration clause, check: (a) who pays the arbitrator — should be the employer for most claims, (b) is there a class/collective action waiver — almost always yes, check if it's enforceable in your jurisdiction, (c) can you still file administrative charges with the EEOC, NLRB, or state labor board — these rights can't be waived.
• Governing law: should be the state where you work. Non-coincidental choices of Delaware, New York, or other business-friendly jurisdictions often signal an effort to dodge employee-protective state laws.
• Entire agreement / integration clause: states that the written contract is the complete agreement and supersedes all prior discussions. If HR promised you something verbally — a bonus, flexible hours, promotion timeline — and it's not in the contract, this clause kills it. Get everything in writing.
• Amendment clause: how can the contract be changed? 'Company reserves the right to amend at any time' is common but problematic — it means your contract can change without your consent. Push for 'amendments require written consent of both parties.'
• Survival clause: which provisions survive termination? Non-compete, confidentiality, and IP assignment usually survive. Make sure the survival duration matches the restriction duration — you don't want confidentiality to be perpetual if the non-compete expires in 12 months.

Step 6: Run It Through AI (The 30-Second Final Pass)

After you've done your manual review, run your employment contract through an AI checker. The AI catches things humans miss — inconsistencies between clauses, hidden definitions that change the meaning of key terms, and one-sided language buried in boilerplate.

Our free employment contract review tool scans your entire agreement in under 30 seconds and returns:

• An overall risk score (0–100) so you know whether to sign, negotiate, or walk away.
• Clause-by-clause findings with severity ratings — exactly which paragraphs are problematic and why.
• Suggested replacement language for each flagged clause — ready to send to HR.
• A track-changes DOCX you can download and share — red strikethrough for deletions, blue for suggested additions.
• After your review: take the risk report to HR, use the suggested language to negotiate, or if everything looks clean — sign with confidence. The whole process takes 30 seconds plus however long you spend reading the report.