Most people spend more time negotiating salary than reading the contract that governs the next several years of their career. These 9 clauses can restrict where you work, who you can hire, and what you can build — long after you leave.
Employment contracts are often presented as take-it-or-leave-it documents, especially at larger companies. But many clauses are negotiable, and understanding what you're agreeing to is the first step to deciding whether to ask for changes, sign anyway with eyes open, or walk away.
A non-compete restricts where you can work after leaving the company — by industry, geography, and duration. Enforceability varies dramatically by state. California bans non-competes almost entirely (Business and Professions Code §16600). Minnesota banned them in 2023. In most other states, courts enforce them if they're "reasonable" in scope, geography, and time.
"Anywhere in the United States" combined with "directly or indirectly" is overreach for most roles. Acceptable non-competes name a specific geographic radius (typically where you actually worked with clients) and a narrower definition of competition. 12 months is more defensible than 24.
Intellectual property assignment clauses transfer ownership of anything you create during your employment to your employer. The dangerous version has no carve-out for personal work done on personal time with personal equipment. This can mean a side project, an open-source library, or even a novel you write evenings and weekends theoretically belongs to your employer if it's "related to the Company's business."
Mandatory arbitration clauses require you to resolve employment disputes through a private arbitrator instead of court. This has two major implications: you give up the right to a jury trial, and — more importantly — you usually give up the ability to join a class action lawsuit. If the company systematically underpays a category of employees, arbitration forces each person to file individually, which makes litigation economically unviable.
Arbitrators are typically paid by the company and handle many cases for the same employer repeatedly. Research on arbitration outcomes consistently shows employees win less often and recover smaller amounts than in court. The Federal Arbitration Act preempts most state efforts to ban mandatory arbitration, though California has repeatedly tried.
Equity clawbacks allow a company to take back vested stock or options under specified circumstances. Triggers can include: resigning within a certain period, working for a competitor within 12 months, or a company determination that you violated a policy. The last category — policy violation — is the dangerous one, because it can be invoked after the fact to reclaim equity from someone the company just wants to remove.
"Sole discretion" appearing twice in one clause should always prompt a question. Ask specifically what conduct triggers this provision and get any carve-outs in writing.
Sign-on bonuses frequently come with repayment obligations if you leave before a set date, typically 12 to 24 months. The issue is usually in how the repayment is calculated: is it prorated (you repay a fraction based on how long you stayed) or full repayment regardless? Some agreements also require you to repay if you're terminated for cause, even if the termination itself is disputed.
Most US employment contracts are at-will, meaning either party can end the relationship at any time for any reason (with limited exceptions). If your contract contains specific termination procedures — notice periods, cause requirements — that's better protection than at-will. But watch for contracts that appear to offer cause-based termination protection but then define "cause" so broadly it provides no real protection.
Undefined or infinitely expandable "cause" definitions eliminate the protection that a for-cause termination clause is supposed to provide.
Garden leave (more common in UK and financial services contracts, but spreading) means that during your notice period, the company can keep you on salary but prevent you from working — for them or anyone else. You remain an employee on paper but can't interview, join a competitor, or do meaningful work. The notice period effectively functions as an additional, paid non-compete.
If you're in a fast-moving field where 3 to 6 months of idleness creates real reputational and technical obsolescence, garden leave provisions deserve careful scrutiny. Negotiate to shorten the notice period or add a mutual opt-out clause.
Non-solicitation clauses are often attached to or nested inside non-compete provisions. They restrict you from hiring former colleagues or approaching former clients after leaving. The key distinction is scope: "you can't poach people you directly managed" is reasonable; "you can't work alongside anyone who was ever employed by the company in any capacity during your tenure" is not.
Under the National Labor Relations Act, most employees in the US have the right to discuss wages and working conditions with coworkers. Confidentiality clauses that explicitly or implicitly prohibit salary discussion may be unenforceable and could violate NLRA protections. This matters because pay transparency is how pay inequity gets discovered. Know your rights before agreeing to keep your compensation confidential.
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Paste your employment contract into Kaido for a full clause-by-clause analysis — non-competes, IP assignment, arbitration, and more. Know exactly what you're agreeing to before you sign.
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