Employment Contracts: What to Look for Before You Sign

Whether you're accepting your first job offer or transitioning to a new role, an employment contract is one of the most important legal documents you'll encounter in your career. Yet many employees sign on the dotted line without fully understanding what they're agreeing to — sometimes with serious consequences down the road.
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At our firm, we've seen firsthand how a poorly drafted or misunderstood contract can limit an employee's options, expose them to unexpected risks, or leave them without recourse when things go wrong. Here are some things to consider before you sign.

1. Compensation and Benefits — Read Beyond the Salary

The base salary is usually the first thing people look at, but it's far from the only number that matters. Pay close attention to:

• Bonus structures: Is the bonus discretionary (meaning the employer can choose not to pay it) or performance-based with defined metrics? A "target bonus" may not be a guaranteed bonus.
• Equity and stock options: If you're receiving stock options or equity, understand the vesting schedule, cliff periods, and what happens to your shares if you're terminated or the company is acquired.
• Benefits eligibility: When do health, dental, and retirement benefits kick in? Some contracts include a waiting period that isn't discussed during the offer stage.

2. Job Title, Duties, and Reporting Structure

​Vague job descriptions can work against you. A contract that broadly defines your role — or reserves the employer's right to change it at any time — can lead to a situation where your responsibilities expand significantly without any corresponding change in compensation.
Look for language that clearly defines your title, core responsibilities, and who you report to. If your role is senior, consider whether the contract addresses authority over budgets, hiring, or strategic decisions.

3. At-Will Employment vs. For-Cause Protection

Most private-sector employees in the United States work "at will," meaning either party can end the employment relationship at any time, for any lawful reason. However, some contracts provide greater job security by requiring the employer to show "cause" before terminating an employee.

If your contract includes a "for cause" termination provision, examine how "cause" is defined. Broad definitions — such as "conduct detrimental to the company" — can effectively strip away those protections.
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Also look for:

• Notice requirements: Does either party have to provide advance notice before terminating?
• Severance: Is severance guaranteed, discretionary, or tied to signing a release of claims?

4. Non-Compete and Non-Solicitation Clauses

These provisions can have a major impact on your career if things don't work out.

A non-compete agreement restricts you from working for a competitor or starting a competing business for a period of time after your employment ends. Their enforceability varies significantly by state — Minnesota and other states have banned most non-compete agreements and refuse to enforce them, while others uphold them if they're reasonable in scope and duration.

A non-solicitation agreement typically prohibits you from recruiting your former colleagues or soliciting the company's clients after you leave. 

​Before signing, consider: How long does the restriction last? What geographic area does it cover? How broadly is "competition" defined? These details matter enormously.

5. Intellectual Property and Confidentiality

Most employment contracts include provisions assigning ownership of work product to the employer. This is standard — but the scope of those provisions can be surprisingly wide.

Watch for language that:

• Assigns rights to inventions or creative work you developed on your own time, using your own resources
• Defines "confidential information" so broadly it would restrict your ability to use general industry knowledge after you leave
• Prohibits or requires you to disclose side projects or outside work

​If you have existing intellectual property, patents, or a side business, you may want to negotiate a carve-out before signing.

6. Dispute Resolution and Choice of Law

Many employment contracts include mandatory arbitration clauses, which require you to resolve disputes through private arbitration rather than in court. This limits your ability to bring a lawsuit, participate in a class action, or have your case decided by a jury.
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Also check the choice of law and venue provisions. If you live and work in Minnesota but the contract specifies that all disputes will be governed by Delaware law and litigated in Delaware courts, that can be expensive and may become a practical barrier to enforcing your rights.

7. Modification and Integration Clauses

An integration clause (also called a merger clause) states that the written contract is the complete agreement between the parties — meaning any verbal promises made during the hiring process are not enforceable unless they're in the document.
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If your recruiter or hiring manager made specific commitments about your role, compensation, or working conditions, make sure those commitments are reflected in the written contract before you sign.

When to Consult an Attorney

You don't need a lawyer to review every employment contract — but certain situations call for professional guidance:

• The contract is lengthy, contains legalese, and/or is confusing 
• It includes a non-compete or non-solicitation clause
• You're a senior executive negotiating a complex compensation package
• The contract includes equity, deferred compensation, or stock options
• You've been asked to sign a separation agreement or release of claims
• Something in the contract feels unclear or inconsistent with what you were told

​Employment contracts are negotiable more often than people realize. An attorney can help you identify problematic provisions, propose alternative language, and understand your rights and risks before you commit.

Schedule an Employment Contract Review