Why People Don’t Read Employment Contracts
The psychology is slightly different from freelance contracts. With a job offer, there's an additional layer: you want the job, you've already accepted it verbally, and the written contract feels like a confirmation rather than a negotiation. Pushing back on clauses feels more personal — it's not a client relationship, it's your employer before you've even started.
A 2023 CareerBuilder survey found that 60% of professionals regret not reviewing their employment contract more carefully before signing. The regret usually comes later, when a restrictive covenant limits their next move, or a probation clause is used in a way they didn't expect.
You don't need to understand every word. You need to find and understand the clauses that matter most.
1. Restrictive Covenants
This is the category that causes the most post-employment problems, and it covers several distinct clauses often grouped under ‘Post-Termination Restrictions’ or ‘Covenants.’
Non-Compete Clauses
A non-compete prevents you from working for a competitor — or starting a competing business — for a defined period after you leave. The three things to assess: how long is the restriction (6–12 months is common; over 12 months is worth questioning), how broadly is ‘competitor’ defined, and what geography does it cover.
In the UK, non-compete clauses are subject to a reasonableness test. Courts will not enforce a restriction that goes further than necessary to protect a legitimate business interest. In the US, enforceability varies dramatically by state — California essentially bans non-competes, while Florida enforces them aggressively.
Non-Solicitation Clauses
A non-solicitation clause prevents you from approaching your employer's clients or employees after you leave. These are generally more consistently enforceable than non-competes. The risk areas: clauses that prevent you from working with clients who approach you, clauses with no time limit, and clauses that apply to clients you introduced yourself.
Garden Leave
Garden leave means your employer can require you to work out your notice period without coming into the office or contacting clients — on full pay, but effectively sidelined. During garden leave, post-termination restrictions typically continue to run, meaning the clock starts on your non-compete even while you're technically still employed.
If your contract includes a long notice period and restrictive covenants, do the maths on the combined effect. A 6-month notice period plus a 12-month non-compete means 18 months before you're fully free to move to a competitor.
2. Probationary Period Terms
Probationary periods are standard, but the terms vary significantly. Most importantly: notice during probation is typically much shorter — often just one week — meaning your employer can let you go with minimal warning at any point in the first three to six months.
Watch for the extension clause. Most contracts give the employer the right to extend probation where performance ‘has not been satisfactory’ — a subjective standard. Also check which benefits are deferred until probation passes: bonus eligibility, enhanced pension contributions, and private medical cover are often withheld during this period.
See the full article on probationary period terms for a detailed breakdown: Probationary Period in Your Employment Contract
3. Intellectual Property and Inventions
Employment contracts almost universally give your employer ownership of IP you create in the course of employment. The risk is in how broadly ‘in the course of employment’ is defined.
The broad version includes work ‘related to the Company's business or any business it is reasonably contemplated the Company might undertake.’ This could cover personal side projects in your industry — particularly dangerous for developers, designers, and creative professionals.
If you have existing side projects or plans to build something independently during employment, read the IP clause carefully and get a carve-out in writing before you start. Retroactively negotiating IP ownership is much harder once you've begun the role.
4. Variation Clauses
A variation clause gives your employer the right to change the terms of your contract. The most common version: ‘The Company reserves the right to make reasonable changes to your terms and conditions of employment. You will be notified of any such changes.’
‘Reasonable’ is deliberately vague. In the UK, unilateral contract variation without genuine consent is generally unlawful — but a broad variation clause is sometimes used to argue implied agreement to future changes. Watch specifically for variation clauses that reference pay, location, or fundamental duties.
5. Arbitration Clauses
An arbitration clause requires you to resolve employment disputes through private arbitration rather than through employment tribunals or courts. It waives your right to pursue claims through standard legal processes.
Arbitration is generally considered more favourable to employers: arbitrators have ongoing relationships with companies, proceedings are private, and awards are typically final. In the UK, arbitration cannot override statutory employment rights. In the US, mandatory arbitration clauses are widespread and largely enforceable.
6. Termination and Notice Provisions
Check: your notice period (both directions), whether the employer has a PILON (payment in lieu of notice) right to remove you immediately, what constitutes ‘gross misconduct’ permitting summary dismissal, and whether contractual severance is included for senior roles.
The notice period is your financial cushion. A longer notice period protects you — it means more time to find your next role if you're let go. Don't overlook it as a negotiating point.
If you have an employment contract in front of you, BeforeYouSign gives you a plain-English breakdown of every clause in 60 seconds — including restrictive covenants, IP provisions, and termination terms. No account required. No data stored. From $9.99.
Scan Your Contract7. Flexibility and Working Hours
Contracts often include a clause requiring you to work ‘such hours as are necessary to fulfil your duties’ — effectively a blank cheque for unpaid overtime. In the UK, employees can sign away their 48-hour weekly limit under the Working Time Regulations. Check whether the contract includes a working time opt-out and whether you're comfortable with it.
What You Can Negotiate
The most realistic areas to negotiate before signing:
- Notice period — particularly if you want a longer period than offered.
- Non-compete scope and duration — narrowing the definition of competitor or shortening the period.
- IP carve-outs — if you have side projects, get them excluded in writing before you start.
- Probationary period length — some employers will negotiate, particularly for senior hires.
FAQ
Do I have to sign my employment contract before starting work?
Technically, a contract can be implied by conduct. But you should always get terms in writing before you start, and you have much more negotiating leverage before you sign than after you've begun the role.
Can my employer change my employment contract after I've signed it?
Not unilaterally, as a general rule. In the UK, changing employment contract terms without consent can constitute constructive dismissal if the change is significant enough. However, broad variation clauses in the contract can complicate this — which is why it's worth checking them before you sign. See our full guide: Can Your Employer Change Your Contract Without Telling You?
What is a restrictive covenant in an employment contract?
A restrictive covenant limits what you can do after you leave the company. The main types are non-compete clauses, non-solicitation clauses, and confidentiality obligations. They're enforceable if they go no further than necessary to protect a legitimate business interest. Read more: Restrictive Covenants in Employment Contracts
How long can a non-compete last in an employment contract?
In the UK, courts typically consider 3–12 months reasonable for most employees. In the US, it varies by state — California effectively bans non-competes, while Florida may enforce multi-year restrictions. See: Non-Compete Clauses: UK vs US
Read the full breakdown of each clause type in the supporting articles:
- Probationary periods
- Non-compete clauses UK vs US
- Restrictive covenants explained
- Can your employer change your contract
BeforeYouSign is an AI-powered educational tool. It does not provide legal advice. Always consult a qualified legal professional before making binding legal decisions.