Employment Contract Negotiation: What You Can (and Must) Push Back On

# Employment Contract Negotiation: What You Can (and Must) Push Back On

You got the offer. Congratulations. Now comes the part most people skip: actually reading the employment contract before they sign it.

Employment agreements are drafted by the company's lawyers to protect the company. That doesn't mean every clause is unfair — but it does mean there are several provisions you should always scrutinize, and a number you should actively negotiate before your start date.

Here's what experienced professionals push back on, and how to do it.

## Non-Compete Scope and Duration

Non-competes are the single most negotiated clause in employment agreements — and for good reason. A poorly drafted non-compete can prevent you from working in your industry for one to two years after leaving.

> ⚠️ **Red Flag:** *"Employee shall not, for a period of two (2) years following termination, directly or indirectly engage in any business that competes with Company in any market in which Company operates or intends to operate."*

Two problems here: "any market in which Company operates or **intends to operate**" is effectively unlimited geographic scope, and "directly or indirectly" can be construed to prohibit working for a competitor even in a completely unrelated role.

**What to push for:** Limit the geographic scope to the specific territory you actually served. Limit the role restriction to roles that are actually competitive (e.g., "the same or substantially similar role" rather than "any role"). Push to reduce duration — six to twelve months is generally considered reasonable; two years is aggressive.

Note: Non-competes are unenforceable in California and increasingly restricted in other U.S. states. In Canada, courts frequently strike down overbroad non-competes. Enforceability depends heavily on scope and consideration.

## IP Assignment Clauses That Steal Your Side Projects

Most employment agreements include an intellectual property assignment provision — and most people don't read it carefully enough. These clauses typically assign to your employer all IP you create "in connection with your employment" or "using company resources."

> ⚠️ **Red Flag:** *"Employee hereby assigns to Company all right, title, and interest in any inventions, works of authorship, or developments created during the term of employment, whether or not created during working hours or using Company resources."*

"Whether or not created during working hours or using Company resources" is the killer phrase. Under this clause, the mobile app you built on weekends using your own laptop could belong to your employer.

**What to push for:** Request a carve-out for side projects: "Notwithstanding the foregoing, the parties agree that the IP assignment does not apply to inventions or works: (a) developed entirely on Employee's own time; (b) without using Company equipment or resources; and (c) that do not relate to Company's current or reasonably anticipated business." Many companies will accept this language — especially for technical roles. Come to the negotiation with a list of any existing side projects you want explicitly excluded.

## At-Will vs. For-Cause Termination

In most U.S. states, employment is at-will by default — meaning either party can end the relationship at any time, for any reason. But a contract can modify this. Know what your contract actually says.

**At-will language:** "Employment is at-will and may be terminated by either party at any time, with or without cause, with or without notice."

**For-cause protection:** "Company may terminate Employee's employment only for Cause. 'Cause' means: (a) material breach of this Agreement; (b) conviction of a felony; or (c) willful misconduct materially harmful to Company."

For-cause protection is significantly better. If you're in a senior role or moving to a risky startup, push for it — or at minimum, push for a defined notice period (typically 30–90 days) that gives you runway to find your next role.

## Severance: What's Guaranteed vs. Discretionary

Many employment agreements include severance language that sounds generous but is actually discretionary — meaning the company can decide not to pay it.

> ⚠️ **Red Flag:** *"In the event of termination without cause, Company may, at its discretion, provide a severance payment equivalent to [X] weeks of base salary."*

"May, at its discretion" means they don't have to. Push to replace "may" with "shall." Also check whether severance is conditioned on signing a release — which is common and generally acceptable, as long as you understand you're trading any legal claims you might have for the severance payment.

## Bonus Clawback Provisions

Signing bonuses and retention bonuses often come with clawback provisions — meaning if you leave before a certain date, you have to repay some or all of the bonus. This is legitimate. What's not legitimate is an overly aggressive clawback schedule or clawbacks triggered by termination without cause.

> ⚠️ **Red Flag:** *"If Employee voluntarily resigns or is terminated for any reason within 24 months of the Start Date, Employee shall repay 100% of the signing bonus within 30 days of separation."*

"Terminated for any reason" would require you to repay the bonus even if *they* fire you without cause. Push to limit clawbacks to voluntary resignation only, and negotiate a pro-rated schedule (e.g., 50% after 12 months, 0% after 24 months).

## Garden Leave Clauses

Garden leave (also called "gardening leave") requires you to keep working — technically — but stay away from the office and clients during your notice period. You continue to be paid but cannot start your next job.

This can be reasonable in sensitive roles. But combined with a long notice period, it can be used to functionally impose a non-compete without calling it one.

**What to push for:** If you have a garden leave clause, push to limit the notice period (and thus the garden leave period) to a reasonable window. Clarify that garden leave does *not* extend any non-compete period — they should run concurrently, not consecutively.

## Mandatory Arbitration Waivers

Many employment agreements require you to arbitrate any disputes rather than sue in court. Class action waivers are particularly concerning — they prevent you from joining with other employees in collective claims.

> ⚠️ **Red Flag:** *"Any dispute arising from or relating to Employee's employment shall be resolved exclusively through binding individual arbitration, and Employee waives any right to participate in a class or collective action."*

Arbitration often favors employers statistically, and class action waivers mean you can't join with colleagues who experienced the same issue (e.g., wage theft, discrimination). Negotiating this out entirely is difficult at large companies, but worth attempting at smaller employers or in senior roles.

## Non-Solicitation Breadth

Non-solicitation clauses prevent you from recruiting your colleagues or soliciting your employer's clients after you leave. The problem is breadth.

> ⚠️ **Red Flag:** *"Employee shall not, for two (2) years after termination, directly or indirectly solicit, hire, or engage any person who is or was an employee of Company during the preceding 24 months."*

"Was an employee...during the preceding 24 months" means this clause covers people who already left the company before you did. Combined with "indirectly," it could prevent you from joining a company where a former colleague already works. Push to narrow this to employees you directly managed or had substantial business contact with.

## Before You Sign Your Offer

Employment contracts are long, and the problematic clauses are rarely in the main body — they're in the schedules, exhibits, and defined terms. Run your offer letter and employment agreement through **Contract Checked** to get a plain-English breakdown of every clause before you sign.

The cost of negotiating these terms before you start is zero. The cost of discovering you can't take your next job because of an overbroad non-compete is enormous.

## Related Guides

- [Employment Contract Analysis: What to Look For](/analyze/employment-contract)
- [NDA Guide: Mistakes That Can Backfire](/blog/nda-mistakes-that-backfire)
- [Browse All Contract Types](/contract-types)

## Analyze Your Contract Before You Sign

Don't navigate this alone. Upload your contract to Contract Checked and get an instant plain-English analysis — free, no login required. [Analyze your contract now →](https://contractchecked.com/#upload-section)