Context Slice Employment Contract Analysis Framework
Compensation Assessment
Base Salary
🟢 Clearly stated, matches verbal offer
🟡 Ambiguous payment terms or schedule
🔴 Differs from verbal offer or unclear
Bonus
🟢 Clear targets and calculation method
🟡 Discretionary bonus with no guaranteed minimum
🔴 "Up to" language with no floor, or unclear attainment criteria
Equity
🟢 Standard 4-year vest, 1-year cliff, fair strike price
🟡 Backloaded vesting, unclear valuation
🔴 Extended cliff, aggressive clawback, no acceleration on acquisition
Severance
🟢 Defined severance for termination without cause
🟡 Severance only if you sign additional release
🔴 No severance, or clawback of prior compensation
Restrictive Covenants
Non-Compete
Geography × Duration × Scope
🟢 No non-compete, or very narrow (specific clients only)
🟡 6-12 months, reasonable geography, same industry
🔴 12+ months, broad geography, adjacent industries included
State considerations:
- California: Generally unenforceable
- Washington, Colorado, DC: Restricted for lower-wage workers
- Most states: Must be reasonable in scope and supported by consideration
Non-Solicitation
🟢 Can't solicit specific clients you worked with, limited duration
🟡 Can't solicit any company clients or employees
🔴 Can't work with anyone who was ever a client, extended duration
Confidentiality
🟢 Protects actual trade secrets, reasonable duration
🟡 Broad definition of confidential information
🔴 Perpetual obligation, includes general skills/knowledge
Intellectual Property
Work Product Assignment
🟢 Work product during work hours using company resources
🟡 All work product "related to" company business
🔴 All work product during employment, regardless of relation
Prior Inventions
🟢 Clear carve-out process for prior work
🟡 Must disclose but allowed to exclude
🔴 No carve-out provision, or company claims prior work
Side Projects
🟢 Permitted with reasonable disclosure requirements
🟡 Requires approval but process exists
🔴 Prohibited or company claims ownership
Termination Terms
At-Will vs Fixed Term
🟢 At-will with reasonable notice convention (2 weeks)
🟡 At-will with extended notice requirement for employee
🔴 Asymmetric notice (they can terminate immediately, you need 30+ days)
For Cause Definition
🟢 Specific, objective criteria (fraud, felony, material breach)
🟡 Includes subjective criteria (poor performance, conduct)
🔴 Very broad cause definition, eliminates severance easily
Clawback Provisions
🟢 No clawback beyond legal requirements (SOX, Dodd-Frank)
🟡 Bonus clawback for voluntary departure within year
🔴 Equity clawback, signing bonus repayment for years
Red Flags
- Broad arbitration: Waiving jury trial for all disputes
- Class action waiver: Can't participate in class actions
- Unilateral modification: Company can change terms without consent
- Garden leave without pay: Can't work elsewhere, not getting paid
- Liquidated damages: Penalty payments for early departure
- Unclear equity terms: No mention of acceleration, treatment on termination
Questions to Ask
- "Can you clarify the non-compete—what specific competitors does this cover?"
- "What happens to my unvested equity if I'm terminated without cause?"
- "Is there flexibility on the non-solicitation duration?"
- "Can you share the severance policy referenced here?"
- "How have prior inventions carve-outs been handled for other employees?"