Job Offer Contract Red Flags: What to Check Before You Sign
This page is general information, not legal advice.
A job offer can feel like the finish line, so the contract gets signed quickly, and one-sided terms slip through. Below are six job offer contract red flags, each with example wording, why it can work against you, and what to ask for instead. Most employers expect questions, and asking calmly and specifically is normal.
If you are also signing a confidentiality agreement, read our NDA red flags guide. Some restrictive terms sit there, not in the offer letter.
1. A broad non-compete
Example wording (illustrative, not from a real contract):
For a period of [X] months after termination for any reason, Employee shall not engage in any business that competes with the Company, in any capacity, anywhere in the world.
Why it works against you
"Any business," "any capacity," and "anywhere" together could cover most jobs you are qualified for. "Termination for any reason" means it may apply even if you are laid off. Treatment varies widely by location, so ask a qualified lawyer before assuming anything.
What to ask for instead
Ask for a narrow scope: named direct competitors, your actual role, a limited area, and a short period. Also ask that it not apply if you are let go without cause.
Sample wording to propose:
For [X] months after a voluntary resignation, Employee will not perform substantially similar duties for the competitors listed in Schedule A. This restriction does not apply if the Company ends employment without cause.
2. An invention assignment that covers personal projects
Example wording (illustrative, not from a real contract):
Employee assigns to the Company all inventions, works, and ideas conceived during the term of employment, whether or not during working hours or using Company resources.
Why it works against you
This could give the employer a claim to side projects, open-source work, or weekend writing on your own equipment. Like a perpetual content license, rights once handed over can be hard to get back.
What to ask for instead
Limit the assignment to job-related work or work using company resources, and list existing projects you keep.
Sample wording to propose:
This assignment covers only work created within the scope of Employee's duties or using Company equipment, time, or confidential information. Projects listed in Exhibit B and unrelated personal projects remain Employee's property.
3. A signing bonus clawback
Example wording (illustrative, not from a real contract):
If Employee's employment ends for any reason within [X] months, Employee shall repay the full signing bonus within [X] days.
Why it works against you
"For any reason" could mean repaying the whole bonus even if the company lets you go. Without proration, leaving one day early costs the same as leaving on day one.
What to ask for instead
Ask that repayment apply only if you resign or are fired for cause, and shrink monthly.
Sample wording to propose:
Repayment applies only if Employee resigns or is terminated for cause before [X] months. The amount owed is reduced pro rata for each full month worked.
4. At-will employment with a long notice period only for you
Example wording (illustrative, not from a real contract):
Employment is at will and the Company may terminate at any time without notice. Employee must give [X] weeks' written notice of resignation.
Why it works against you
The company can end things immediately while you are locked into a long notice period. A new employer may not wait, and unpaid amounts may depend on giving full notice.
What to ask for instead
Ask for equal notice on both sides, or pay in lieu if the company ends things first.
Sample wording to propose:
Either party may end employment with [X] weeks' written notice. The Company may pay base salary for the notice period instead of requiring the Employee to work it.
5. Compensation or role that can change at will
Example wording (illustrative, not from a real contract):
The Company may modify Employee's title, duties, compensation, and benefits at its discretion.
Why it works against you
Your negotiated salary and role may be just a starting point the employer can change alone, like platform terms that let the provider change the rules later.
What to ask for instead
Ask that base pay not drop without your written agreement, and that a major role change let you leave on layoff terms.
Sample wording to propose:
Base salary will not be reduced, and duties will not be materially changed, without Employee's written consent.
6. Mandatory arbitration
Example wording (illustrative, not from a real contract):
Any dispute arising from employment shall be resolved exclusively by binding individual arbitration. Employee waives any right to a jury trial or class proceeding.
Why it works against you
You may give up going to court or joining coworkers with the same complaint. Costs and process depend on the details; our mandatory arbitration clause explainer covers what to look for.
What to ask for instead
Ask for an opt-out window, employer-paid arbitration fees, and a carve-out for small claims.
Sample wording to propose:
Employee may opt out of this arbitration provision by written notice within [X] days of signing. The Company will pay all arbitration fees beyond a standard court filing fee.
Before you sign
Get every change written into the contract itself, not an email saying "we won't enforce that." If you freelance, compare your offer with our freelance contract red flags and check how the invention assignment affects that work. For caps on what each side can recover, see the limitation of liability clause explained. If a clause is unclear or the stakes are high, ask a qualified lawyer.
Scan your own document free
Upload your offer letter or employment contract to the ScanMyTerms employment contract review. In about a minute it flags clauses like these, quotes the wording, and suggests alternatives. The free preview shows the risk count and first two findings. The full report costs a one-time $5 per document.
This page is general information, not legal advice.