A job offer is often only the beginning. If you sign an employment contract, its terms can control pay, termination and your ability to work elsewhere.
Terms to read closely
- At-will status or a fixed term, and how either side can end the job.
- Pay structure, bonuses, commissions and when they are earned.
- Benefits, equity and vesting schedules.
- Non-compete, non-solicitation and confidentiality clauses.
- Ownership of work and inventions.
- Arbitration clauses and limits on lawsuits.
- Repayment of signing bonuses or training costs.
Red flags
- Vague duties or compensation.
- Penalties for leaving early.
- Broad restrictions that cover work outside the company.
- Terms that conflict with the offer letter.
How to protect yourself
- Compare the contract with the offer letter and anything promised verbally.
- Ask for changes in writing before you sign.
- Keep a signed copy.
- Have a lawyer review contracts with high pay, equity, a non-compete or an unusual structure.
After signing
A contract can usually be changed only by agreement. If your employer wants to change important terms, ask what you receive in exchange and whether you are required to sign.
Frequently asked questions
Is an offer letter a contract?
Sometimes, depending on its terms and your state. Many are at-will and say so.
Can I negotiate after receiving an offer?
Yes. Many employers expect some negotiation.