Employment Contract Review: Everything You Need to Know

Employment contract review is an important step before accepting a new job so you can get the best deal possible.4 min read

Employment contract review is an important step before accepting a new job. If you don't review the contract before signing, you may not be getting the best deal possible. You may even jeopardize future employment opportunities.

What is an Employment Contract?

Employment contracts are often used for new employees as they spell out the specific terms and conditions new hires must agree to when accepting the position. Some of the terms may include:

  • The duration of the position.
  • The responsibilities and expectations while on the job.
  • The expected salary and stipulations of raises.

Some contracts may include information on how long the position is good for, what the acceptable reasons are to be terminated, and how much severance pay will be offered.

Formally drafted employment contracts that guarantee employment for a specified amount of time are rare, as most states follow the at-will employment rule. However, in highly competitive positions, like executives and technical experts, you may find the use of employment contracts more common.

It's not uncommon to include restrictive clauses which help retain important employees and maintain high levels of productivity. Restrictive clauses can include a non-compete clause or prevent employees from soliciting other the company's competitors.

Non-Compete Clauses

Non-compete clauses are not seen in every employment contract. Not all non-compete clauses are enforceable, and certain states set limits on what they will accept. California is one state that is very restrictive when it comes to protecting employees, while other states are more employer-friendly when it comes to enforcing non-compete clauses.

If your new employer does not want to delete the non-compete clause, you can at least ask to limit its scope. If an employer tries to state you cannot work for a competing business in your state, it would mean you have to move. Instead, ask them to limit it to your city. That means you could work in a nearby city without having to move.