Employment Contract Review: A Step-by-Step Process

You've been offered a new role. The salary looks right, the title's good, and you want to start as soon as possible. HR sends over the contract and asks you to sign by Friday. It's 18 pages long. You skim to the salary section, check the start date, and sign. Six months later, you discover the non-compete clause means you can't work for any competitor within 25 miles for a full year after leaving — and the restrictive covenant on client contact goes even further.

An employment contract review is the single most important thing you can do between receiving a job offer and signing it. Yet most people spend more time reading restaurant reviews than reading the contract that governs their livelihood.

An employment contract review involves checking every clause in a job offer contract for restrictive covenants, notice periods, IP assignment, bonus clawbacks, and termination provisions. It identifies one-sided terms and gives you the information to negotiate before you sign.

Why You Need an Employment Agreement Review

An employment agreement review isn't about being difficult or adversarial. It's about understanding what you're committing to — often for years — before you're legally bound.

Employment contracts typically contain a mix of express terms (what's written), implied terms (what the law assumes), and statutory rights (what employment legislation requires regardless of what the contract says). The express terms are where the problems hide, because they're the ones your employer has deliberately drafted to protect their interests.

The most common issues found in employment contracts include overly broad non-compete clauses, aggressive IP assignment provisions, one-sided notice periods, discretionary bonus clauses that allow the employer to withhold payment, and garden leave provisions that keep you employed but idle.

Many employees assume these terms are standard and non-negotiable. They usually aren't.

What to Check: The Essential Clauses

Restrictive Covenants (Non-Competes and Non-Solicitation)

Restrictive covenants limit what you can do after you leave. A non-compete clause might prevent you from working for a competitor for 6 or 12 months. A non-solicitation clause might prevent you from contacting clients or colleagues.

In most jurisdictions, restrictive covenants are only enforceable if they protect a legitimate business interest (such as trade secrets or client relationships) and go no further than is reasonably necessary. In the UK, the Supreme Court confirmed in Tillman v Egon Zehnder [2019] that courts can “blue pencil” overly broad restrictive covenants — striking out the unreasonable parts and enforcing the rest — and courts in many other jurisdictions take a similar approach.

Check the duration (6 months is more enforceable than 24), the geographic scope (nationwide restrictions are harder to enforce than local ones), and the definition of “competitor” (is it narrowly defined or so broad it covers half your industry?).

Notice Periods

Check whether the notice period is reciprocal. If your employer can terminate with 4 weeks' notice but you must give 3 months, that asymmetry limits your flexibility. Most jurisdictions set statutory minimum notice periods — for example, the UK's Employment Rights Act 1996 requires one week per year of continuous employment (up to 12 weeks) — but contracts frequently exceed these minimums.

Also check for garden leave provisions — clauses allowing the employer to keep you on payroll but bar you from working during your notice period. This can effectively extend your non-compete by the length of the notice period.

Intellectual Property Assignment

IP assignment clauses determine who owns the work you create during employment. In most jurisdictions, your employer already owns copyright in works created “in the course of employment” (for example, under the UK's Copyright, Designs and Patents Act 1988 or the US “work for hire” doctrine). But many contracts go further, claiming ownership of inventions, ideas, and creative work produced outside working hours or unrelated to your role.

If you have side projects, freelance work, or personal creative endeavours, check whether the IP clause captures those. A clause stating “all intellectual property created during the term of employment” — without limiting it to work-related output — could claim your weekend novel.

Bonus and Commission

Look for the word “discretionary.” If your bonus is described as discretionary, the employer can reduce it to zero regardless of your performance. Contractual bonuses (where payment is conditional on meeting specific, measurable targets) are far stronger.

Also check for clawback provisions — terms requiring you to repay some or all of a bonus if you leave within a specified period. These are generally enforceable if clearly stated and proportionate.

Termination Provisions

How can the contract end? Check for clauses allowing termination “with immediate effect” for broadly defined “gross misconduct” — if the definition is vague, the employer has wide discretion. Check whether pay in lieu of notice (PILON) is contractual or discretionary, as this affects your tax position and your right to payment.

Also look for “entire agreement” clauses that state the contract supersedes all prior representations. If you were promised something verbally during the interview — a pay review after six months, a guaranteed promotion path — and it's not in the contract, the entire agreement clause means it doesn't exist.

Indemnification Clause

Yes, employment contracts can contain indemnification clauses too. These might require you to indemnify your employer against losses arising from your breach of confidentiality, your breach of regulatory obligations, or claims from third parties related to your work.

For senior roles, the indemnity can be significant. Check the scope, check whether it's mutual, and check whether it survives termination.

Lawyer to Review Employment Contract: Is It Worth the Cost?

Hiring a lawyer to review employment contract terms is the gold standard, but it comes at a cost. An employment contract review lawyer typically charges $300–$700 for a basic review, with more complex contracts (senior roles, cross-border arrangements) costing $1,000 or more.

An employment contract lawyer will review the contract, identify problematic clauses, and provide negotiation recommendations. For C-suite positions, partnership agreements, or contracts with significant restrictive covenants, professional legal review is strongly advisable.

But for many mid-level roles, the cost of a contract review lawyer exceeds what feels proportionate to the situation. This is where AI-powered tools fill a critical gap. Running the contract through an analysis tool first identifies the clauses that need attention, so if you do engage a lawyer, you can direct them to the specific issues — making the review faster and cheaper.

A contract review attorney focused on three flagged clauses will charge less than one reviewing 18 pages from scratch.

What a Good Employment Contract Should Include

Beyond avoiding problematic clauses, a well-drafted employment contract should contain clear provisions for: the job title and reporting line, the start date and probationary period (if any), the salary, payment frequency and method, working hours and location (including any hybrid working arrangements), holiday entitlement (check the statutory minimum in your jurisdiction), pension or retirement arrangements, sick pay provisions, confidentiality obligations, and a clear grievance and disciplinary procedure.

If any of these are missing or unclear, that's a negotiation point — not just a red flag, but an opportunity to get the terms right before you start.

How to Negotiate Your Employment Contract

Most people don't negotiate employment contracts because they're afraid of losing the offer. In practice, reasonable negotiations rarely jeopardise a job offer. Here's how to approach it:

Be specific. Don't say “I'm uncomfortable with the non-compete.” Say “I'd like to reduce the non-compete duration from 12 months to 6 months and narrow the geographic restriction to our metro area.”

Propose alternatives. If they won't remove a restrictive covenant entirely, suggest a shorter duration, a narrower scope, or compensation during the restricted period (known as “garden leave pay” in some jurisdictions).

Put everything in writing. If HR agrees to changes verbally, ask for the contract to be amended and reissued before you sign. Verbal promises are extremely difficult to enforce against an entire agreement clause.

Know your leverage. If the role is hard to fill, if you have competing offers, or if you bring specialist skills, you have more negotiating power than you think. Use it professionally but firmly.

Frequently Asked Questions

How much does an employment contract review cost?

A lawyer typically charges $300–$700 for a standard employment contract review. AI-powered tools like BeforeYouSign offer plain-English analysis from $2.99, making it accessible as a first step.

Can I negotiate an employment contract?

Yes. Most clauses in an employment contract are negotiable, particularly restrictive covenants, notice periods, bonus structures, and IP assignment. Employers expect some negotiation from informed candidates.

Are non-compete clauses enforceable?

Only if they protect a legitimate business interest and go no further than reasonably necessary. Duration, geographic scope, and the definition of “competitor” all affect enforceability. Courts can strike out unreasonable provisions.

What's the difference between express and implied terms?

Express terms are written in the contract. Implied terms are obligations the law assumes exist — such as the duty of mutual trust and confidence, or statutory employment rights established by legislation in your jurisdiction.

Should I sign a contract with a clause I don't understand?

No. If you don't understand a clause, you can't assess the risk it creates. Get it explained — either by a lawyer, by an AI analysis tool, or by asking your prospective employer directly.

What if my employer won't change the contract?

Consider whether the clause is actually enforceable (overly broad restrictive covenants often aren't), whether the risk is acceptable given the role, and whether you want to work for an employer that refuses reasonable negotiations.

Key Takeaways

• Always review an employment contract before signing — don't assume terms are standard or non-negotiable.
• Focus on restrictive covenants, IP assignment, bonus terms, notice periods, and termination provisions.
• In most jurisdictions, restrictive covenants must be reasonable and protect a legitimate business interest to be enforceable.
• AI contract analysis tools can identify risks cheaply, helping you decide whether to engage a lawyer for the specific issues that matter.
• Get your employment contract reviewed in minutes — plain-English risk breakdown with negotiation guidance for $9.99.

This is educational content, not legal advice. Contract law is complex and jurisdiction-specific. Consult a qualified lawyer before making decisions based on your specific circumstances.