7 Employment Contract Red Flags You Should Never Ignore

1. Overbroad Non-Compete

If it bars you from working for "any competitor in any capacity for 2 years worldwide," push back. Narrow it to direct competitors and a defined geographic area. Many states (California, Colorado) ban non-competes outright for employees.

2. IP Assignment on Side Projects

Watch for "all inventions, whether or not related to Company business." This claims everything you create — even on weekends. Add a carve-out for work done on your own time with your own equipment.

3. At-Will Override Clauses

"At-will employment" is normal — but clauses that let them fire you "for any reason including unsatisfactory performance determined solely by Company" stack the deck. Have termination tied to objective criteria.

4. Bonus Clawbacks

If you must repay your sign-on bonus when leaving within 12 months — fine. But some contracts claw back bonuses for "any reason including Company financial condition." That is their risk, not yours.

5. Vague Job Duties

"Other duties as assigned" is standard. But "duties to be determined at Company discretion with compensation subject to change" gives them unlimited scope creep. Lock in a written job description.

6. Salary in Lieu of All Equity

"Base salary includes compensation for any and all equity rights." That kills your upside. Either negotiate equity separately or ensure the salary reflects the missing equity value.

7. Post-Employment Restrictions That Kill Your Career

Non-solicit of "any client Company has ever spoken to" can lock you out of an industry. Limit it to clients you personally worked with in the last 12 months.

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