Employment Contract
Employment offer and contract review
Employment contracts define your compensation, restrictions, and exit options. Pinnacle highlights non-compete overreach, IP assignment breadth, and gaps in severance or notice terms.
Key takeaway
Compensation is only part of the deal. Post-employment restrictions, IP assignment, and equity/clawback terms can shape your career for years.
Who should review a employment contract?
Job offers aren't just about salary — employment contracts and offer letters can include non-competes, IP assignment, clawbacks, and at-will language that affects your next move. Review before you accept, especially for senior roles, equity packages, or roles in competitive industries.
Common red flags we catch
- ⚠Non-compete clauses covering an unreasonably wide geography or duration
- ⚠Assignment of inventions made outside work hours without carve-outs
- ⚠At-will language with no severance on involuntary termination
- ⚠Clawback provisions for signing bonuses or relocation
Key clauses explained
Non-compete and non-solicit
Non-competes restrict where you can work after leaving. Non-solicits restrict recruiting colleagues or clients. Enforceability varies dramatically by state — some states ban non-competes entirely. Even where enforceable, scope (duration, geography, industry) must be reasonable.
Invention assignment
Employers often claim ownership of inventions related to your job — and sometimes anything you create during employment. California and other states limit this for personal projects on your own time without company resources. Read the carve-outs.
Compensation and equity
Base salary is only part of the picture. Check bonus targets, commission structure, equity vesting schedule, cliff periods, and what happens to unvested equity if you're terminated.
Termination and severance
At-will employment means either party can end the relationship with notice (or immediately in many states). Severance is usually not required unless promised in writing. Look for termination-for-cause definitions that affect equity or bonus payouts.
Clawbacks and repayment
Signing bonuses, relocation, and tuition often come with repayment schedules if you leave early. Confirm the clock, exceptions for termination without cause, and whether amounts are prorated.
What we review in your employment contract
- Non-compete, non-solicit, and confidentiality scope
- IP and invention assignment with state-law carve-outs
- Compensation, bonus, and equity vesting terms
- Termination, notice, and severance provisions
Pre-sign checklist
- ✓Is the non-compete scope reasonable for your role and location?
- ✓Are personal off-hours projects carved out of IP assignment?
- ✓Is equity vesting schedule and cliff clearly defined?
- ✓What triggers termination for cause vs. without cause?
- ✓Are signing bonus or relocation clawbacks tied to how long you stay?
- ✓Is non-solicit limited to people you actually worked with?
Annotated example clause
Example post-employment restriction (fictional)
Employee shall not, for two years after termination, work for any company that competes with Employer anywhere in the United States, or solicit any customer or employee of Employer.
“two years after termination”
Long duration increases enforceability risk and negotiation pressure.
“anywhere in the United States”
Nationwide scope is often overbroad for non-executive roles.
“any customer or employee”
Non-solicit without a look-back to people you actually dealt with is aggressive.
Drafting-party friendly
Long, nationwide non-compete plus broad non-solicit and invention assignment.
Balanced
Shorter non-solicit limited to customers you worked with; non-compete narrowed or removed based on state law.
Counterparty friendly
No non-compete; limited confidentiality and customer non-solicit only.
Worked examples
Equity cliff surprise
An engineer leaves at month 11 with a one-year cliff. Unvested equity is forfeited.
Takeaway: Confirm cliff, vesting, and acceleration before accepting the offer.
Common pitfalls
- Accepting a nationwide non-compete for a local sales role
- Missing that side projects may be assigned to the employer
- Assuming unvested equity survives termination without checking the plan
- Ignoring arbitration and class-action waiver packages
Negotiation tip
Request narrowing non-compete scope to direct competitors and adding a mutual IP carve-out for personal projects built off-hours without company resources.
Negotiation moves to consider
- Narrow non-compete geography, duration, and competitive definition.
- Add California-style or personal-project IP carve-outs where available.
- Clarify good-reason resignation and severance for senior roles.
- Prorate clawbacks and waive them for termination without cause.
When to contact an attorney
- Executive offers with equity, change-of-control, or severance packages
- Aggressive non-competes in states that still enforce them
- Disputes over invention ownership or threatened enforcement
Frequently asked questions
Are non-compete clauses enforceable?
It depends on state law and the specific terms. The FTC’s nationwide Noncompete Rule is not in effect or enforceable, so there is no federal ban that automatically voids ordinary worker non-competes. Several states restrict or ban non-competes for most workers. Even where allowed, courts often strike down clauses that are too broad in duration, geography, or scope of restricted activity.
Does my employer own side projects I build at home?
Not automatically — but employment IP assignment clauses may claim inventions related to the employer's business or created using company resources. Personal projects on your own time with your own equipment may be protected depending on state law and contract carve-outs.
Should I negotiate an employment contract?
Yes, especially for senior roles. Non-compete scope, equity terms, severance, and start date are commonly negotiated. Even offer letters labeled "non-negotiable" often have room on specific terms if you ask professionally.
Related guides
Other contract types
Not legal advice. Read our disclaimer.