What to Look For Before Signing an Employment Contract
Before signing your employment contract, use this checklist to ensure you understand and agree to all terms. Taking time now can prevent major problems later.
Compensation Checklist
- ☐ Base salary amount is clearly stated
- ☐ Payment frequency (weekly, bi-weekly, monthly) specified
- ☐ Bonus structure has clear targets and metrics
- ☐ Equity/stock options vesting schedule documented
- ☐ Commission structure (if applicable) is defined
- ☐ Signing bonus clawback terms are reasonable
- ☐ Expense reimbursement policy is referenced
Benefits Checklist
- ☐ Health insurance start date and coverage level
- ☐ 401(k) match amount and vesting schedule
- ☐ PTO/vacation days and accrual policy
- ☐ Sick leave policy
- ☐ Parental leave policy
- ☐ Remote work terms if applicable
Job Terms Checklist
- ☐ Job title and duties match what was discussed
- ☐ Start date is confirmed
- ☐ Work location is specified
- ☐ Reporting structure is clear
- ☐ Employment type (full-time, part-time, exempt status)
Restrictive Covenants Checklist
- ☐ Non-compete duration is reasonable (ideally under 1 year)
- ☐ Non-compete geography is limited to relevant areas
- ☐ Competitor definition is specific, not overly broad
- ☐ Non-solicitation scope is defined (customers, employees)
- ☐ Non-compete termination trigger—does it apply if you're fired?
Intellectual Property Checklist
- ☐ IP assignment scope is limited to work-related creations
- ☐ Prior inventions are carved out and listed
- ☐ Personal projects outside work hours are excluded
- ☐ Open source contributions policy is acceptable
Termination Checklist
- ☐ Severance terms are specified
- ☐ Notice period requirements (both directions)
- ☐ For cause definition is clear and fair
- ☐ Accrued PTO payout is addressed
- ☐ Restrictive covenant acceleration—what survives termination?
Dispute Resolution Checklist
- ☐ Arbitration clause—understand what rights you're waiving
- ☐ Class action waiver—know if you're giving this up
- ☐ Location of disputes is reasonable
- ☐ Attorney's fees provision is mutual
Final Checks
- ☐ Verbal promises are reflected in writing
- ☐ Modification rights—can terms be changed unilaterally?
- ☐ Entire agreement clause—no side agreements exist
- ☐ Had attorney review for senior positions
Frequently Asked Questions
What's the most important thing to check in an employment contract?
Restrictive covenants (non-competes, non-solicitation, IP assignment) often have the biggest long-term impact on your career. These can limit your future options for years. Pay close attention to their scope, duration, and triggers.
Should I get an attorney to review my employment contract?
For senior positions, executive roles, or contracts with significant equity or restrictive covenants, attorney review is worthwhile. For standard entry-level contracts, careful self-review using a checklist may be sufficient.
What if the contract doesn't match what was verbally promised?
Ask for the contract to be updated. Verbal promises that aren't in writing are difficult to enforce. If the employer won't put it in writing, that's a warning sign about whether they'll honor the promise.
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