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Before You Sign A Job Contract: NDAs, Non-compete Agreements, and All The Other Details in Small Print.

August 17th, 2024

Last Updated on September 15th, 2026

Job Applications and Interviews, Job Interview Tips and Tricks, Self-management Tools and Strategies
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SUMMARY / KEY TAKEAWAYS

  • Review before signing: before you sign a job contract, check and clarify every key clause, ideally with a lawyer’s help.

  • Restrictive clauses matter: NDAs, non-compete, and non-solicitation clauses can limit your future career moves, so read them carefully.

  • Compensation and benefits: verify salary, vacation days, reimbursement, and severance terms match what was promised in the interview.

  • Know your exit terms: check termination, dispute resolution, and exit-obligation clauses so you understand what happens if the role ends.

  • Communicate concerns early: if something in the contract is unclear or unfavorable, raise it with the Hiring Manager before signing. This is really just one of the steps to take before a career change of any kind, contract or not.

Table of Contents

  1. What is a Non-Disclosure Agreement (NDA)?
  2. What Should You Know About Non-Compete Clauses?
  3. Non-Solicitation Clause.
  4. How do Intellectual Property (IP) rights work in contracts?
  5. What Should You Check in Termination Clauses?
  6. What Should You Verify About Compensation and Benefits?
  7. Work Hours and Flexibility.
  8. Paid Vacation Days.
  9. How Are Disputes Resolved Under the Contract?
  10. What are restrictive covenants in employment agreements?
  11. What Do Liability and Indemnity Clauses Mean for You?
  12. Probationary Period.
  13. Travel & Relocation Requirements.
  14. Conflicts of Interest.
  15. Exit Obligations.
  16. Miscellaneous Clauses.
  17. Amendment Clause.
  18. Lastly, How To Communicate Proposed Changes in the Job Contract to the Hiring Manager?
In addition,

OK, so you’ve just landed your dream job, and the contract is now on your desk. But wait… Before you sign, there are still a number of points to check throughout the contract. For example, Please agree with the Hiring Manager on the contract review deadline. Take time to read every detail — preferably with a lawyer’s help.Similarly,

Before, you can find the standard checklist listing pivotal parts of the agreement.

1. What is a Non-Disclosure Agreement (NDA)?

First, a Non-Disclosure Agreement (NDA) is a legal contract. This contract is between your new employer and yourself; it outlines the confidentiality of certain information shared with you during your employment. The primary purpose of an NDA is to protect sensitive, proprietary, or confidential information. Also, It prevents disclosure to unauthorized third parties (such as, in example, the employer’s market competition).

  • Scope of Confidentiality: Ensure the NDA clearly defines what constitutes “confidential information” and how long the confidentiality obligations last.Exclusions: Check for any information that you exclude from confidentiality, such as information already in the public domain.Duration: Determine how long the NDA will be in effect. For instance, Some NDAs last indefinitely, which might be restrictive and bind your hands in your future jobs. We certainly don’t want that.

2. What Should You Know About Non-Compete Clauses?

A Non-Compete Clause (or Non-Compete Agreement) is a provision. As a result, It restricts you from working for competitors or starting a competing business. This applies within a specific geographic area and for a certain period after leaving your employer. This clause protects the employer’s business interests. On the other hand, It prevents former employees from taking their knowledge, skills, and potentially confidential information to a competitor.

  • Geographic Scope: Verify the regions where the non-compete applies. Moreover, A broad geographic scope could limit your future job opportunities.
  • Duration: Look at how long the non-compete clause is in effect after you leave the company. Long durations (e.g., over a year) can be problematic, especially if you are highly specialized in a narrow industry where “everyone knows everyone.”In contrast,
  • Industry Scope: Ensure the clause doesn’t prevent you from working in your field or industry altogether. The scope of the clause should be reasonable and specific.

3. Non-Solicitation Clause.

A Non-Solicitation Clause is a provision. It restricts you from soliciting or attempting to solicit the company’s clients, customers, or employees after leaving the company. This clause protects the employer’s business. It prevents former employees from taking valuable relationships or talent to a competing business or their own new venture.For example,

  • Clients: This clause might prevent you from soliciting the company’s clients for a certain period after you leave.
  • Employees: You may be restricted from hiring or soliciting current employees to join you at a new company.Similarly,

In general, it is a fair ask from an employer to invite you to sign a non-solicitation clause. For the vast majority of employees, it is not a problem. However, if you have any plans of building your own startup in the future, you should be mindful here. Furthermore, In that case, a non-solicitation clause forbids you from starting your business. You cannot use anyone whom you met at this employer’s company. That restriction matters most if you are already leaning toward business development for solopreneurs down the line.

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4. How do Intellectual Property (IP) rights work in contracts?

Intellectual Property (IP) Rights are ownership and usage rights. For instance, These rights cover creations, inventions, and innovations you will develop during your employment. These rights are a crucial aspect of employment agreements. As a result, This is especially true in industries where creativity, research, and development are integral to the business. According to the U.S. Copyright Office, work an employee creates within the scope of their employment is automatically owned by the employer as a “work made for hire,” with no separate written agreement required, which is why it is worth checking whether your contract defines that scope broadly.

  • Work Ownership: Review who owns the IP you create during your employment. On the other hand, Conventionally, the company will claim ownership for all your work, but check for any exceptions.
    • Prior Inventions: If you have any prior inventions or intellectual property in the same field, make sure they are excluded. Moreover, They must be excluded from the company’s IP claims.
  • Post-Employment: Check whether the company has any claims over IP you create after leaving the company. Getting clarity here early is part of learning how to future-proof your career against disputes down the road. It shouldn’t.

5. What Should You Check in Termination Clauses?

In contrast, A Termination Clause lists the conditions under which you or the employer can end the employment relationship. This clause is crucial because it specifies the rights and obligations of both parties when the employment ends.

In addition,

Voluntary Termination: This occurs when you decide to resign from your position. The clause may specify the required notice period you must give your employer before leaving.

Involuntary Termination: This includes termination by the employer, which can happen for various reasons:

  • For Cause: Termination due to misconduct, poor performance, breach of contract, or other justifiable reasons. This type of termination often does not entitle you to severance pay.
    Similarly,
  • Without Cause: Termination that occurs for reasons not related to your performance or behavior, such as company restructuring or downsizing. If the employer terminates you without cause, you may be entitled to severance pay and other benefits.

When reviewing your termination clause, make sure that you check through the following checkpoints:

  • Notice Period: Understand the notice period required from both sides (you and the employer) in case of resignation or termination.
    Check the conditions for termination. Compare termination for cause versus no cause. Also, check the available severance in each scenario.
    Furthermore,
  • Severance Pay: The eligibility criteria and the amount. The severance amount is often calculated based on factors like length of service, position, and company policy. Also, The employer may pay it as a lump sum or in installments.
    Some contracts may place you on “garden leave.” For instance, During this time, you are paid but cannot work elsewhere.

6. What Should You Verify About Compensation and Benefits?

  • Salary and Bonuses: Ensure the salary, bonuses, and other compensation details are clearly outlined, including any performance-based incentives. If the employer is a public institution,  they might undergo the local Collective Labor Agreement (CAO) and in that case, the salary and other compensation should follow the official salary scale regulated by the government. In other cases, e.g. when your employer is a private company, there is no official regulation. As a result, You can be paid anything — the sky is the limit so to speak. The only rule is that your pay should not fall under the local minimal pay. One thing to remember: you are not obliged to accept the first version of the job contract! If you conclude the proposed salary is too low, consider your experience and agreed responsibilities. Moreover, You can still call the Hiring Manager with a counter-proposal.
  • Benefits: Verify the benefits package, including health insurance, retirement plans, stock options, and other perks. In contrast, Compare with what the company promised you during the interview! Sometimes, the Hiring Manager and the lawyers preparing the contract miscommunicate. In addition, Whatever gets placed in the final agreement, comes to power, so check all benefits point by point.
    Check for clauses related to expense reimbursements. This is especially true if your job involves travel or other out-of-pocket expenses. You should also check if you plan to upskill by taking costly professional courses.

7. Work Hours and Flexibility.

    For example,
  • Work Schedule: Make sure the expected work hours and any overtime policies are clearly stated in the job contract. Understand any expectations for work outside regular hours. You should Pay attention to this point especially if you heard during the job interview: “We are like a family.” Unfortunately, this statement is a red flag that often means: we will be the last people you hear from in the evening and the first people who will call you in the morning. Please read more about red flags in the job application process in our article “Don’t Get Trapped! Red Flags in the Recruitment Process.”
    Furthermore,
  • Remote or Hybrid Work: If applicable, confirm the terms of remote work, including any requirements for being in the office or using specific tools and technologies. For instance, some companies use specialized software to track the employee’s working time when working remotely, which can be stressful and feel like an invigilation.
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8. Paid Vacation Days.

  • Clarity and Transparency: Stating the number of paid vacation days ensures that both the employer and the employee have a clear understanding of the leave entitlements. Also, This helps avoid potential misunderstandings or disputes about vacation time. Contracts like these are one of the many career development resources for professionals worth reading closely before signing.
  • Accrual Basis: Check if vacation days accrue over time (e.g., monthly or annually) or if they are granted in a lump sum at the beginning of each year.
  • Unused Vacation: Check whether unused vacation days can be carried over to the next year or if they expire at the end of the year. For example, “Unused vacation days may be carried over for up to 12 months.”If applicable, clarify any “use-it-or-lose-it” policies where you forfeit unused vacation days if you do not use them within a certain period.For instance, Request and Approval Process for Paid Vacation Days: Check if the procedure for requesting vacation days, including notice requirements and approval processes, is included. For example, “Vacation requests must be submitted at least four weeks in advance and are subject to managerial approval.”
  • Overlap with Public Holidays: Clarify whether public holidays that fall during vacation time are counted as vacation days or if they are in addition to the vacation entitlement.
  • Pro-Rata Vacation: If you are a part-time or temporary employee, check how vacation days are calculated for part-time or temporary employees, typically on a pro-rata basis.As a result,
  • Request and Approval Process for Extra Vacation Days:: Are you allowed to request additional, unpaid vacation days? If so, check whether you include the procedure for requesting extra vacation days, including notice requirements and approval processes.

9. How Are Disputes Resolved Under the Contract?

A Dispute Resolution Clause outlines the methods and procedures that both you and the employer agree to follow if a dispute arises during or after the employment relationship. This clause is beneficial for you as it provides a structured approach to resolving conflicts, potentially avoiding stressful, costly, and time-consuming litigation. Moreover, Arbitration Clause: Some contracts require parties to settle disputes through arbitration rather than in the courtroom. This can potentially limit your legal options if things go south.In contrast,

  • Governing Law: The contract will specify which state or country’s laws govern it (typically, convenient for the employer). This is important if you work remotely from a different jurisdiction.

10. What are restrictive covenants in employment agreements?

Restrictive Covenants are clauses that limit your actions during and after their employment to protect the employer’s business interests. These covenants are designed to prevent employees from engaging in activities that could harm the employer, such as competing with the company, sharing confidential information, or poaching clients and employees.For example,

  • Non-Disparagement: This “gagging” clause might prohibit you from making negative statements about the company during and after your employment.
  • Exclusive Employment: Check if the contract restricts you from taking on other employment or freelance work while working for the company. Most employers allow for additional employment and freelancing for as long as it doesn’t (1) limit your ability to deliver high-quality work for the agreed number of hours a week, (2) provide services competitive toward the employer’s business. However, it is not a rule.

11. What Do Liability and Indemnity Clauses Mean for You?

Liability and Indemnity clauses outline the responsibilities and protections for both you and the employer regarding legal claims, damages, and losses that might arise during the course of employment. These clauses are crucial as they define who bears the financial burden if legal issues or claims arise.Furthermore,

  • Personal Liability: Ensure you are not personally liable for actions taken on behalf of the company, except in cases of gross negligence or misconduct.
  • Indemnification: Look for clauses where you might have to indemnify the company for certain actions, and understand the scope of these obligations.

12. Probationary Period.

A Probationary Period is a designated time frame at the beginning of employment during which the employer assesses your performance, suitability, and fit within the company. During this period, both you and your employer have the opportunity to evaluate whether the employment arrangement is working well.

  • Duration and Terms: Some contracts include a probationary period with different terms for termination or benefits. Ensure you know what changes after this period ends.
  • Milestones: If your contract includes the a probationary period, make sure that it is not associated with unreasonable milestones that will be hard to fulfill before the agreed deadline. Some predatory employers out there deliberately hire for short-term probation period with a promise to extend the contract, only to dispose of employees after a few weeks or a few months without severance and notice period. So, beware.
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13. Travel & Relocation Requirements.

  • Frequency and Conditions for Job-Related Travels: If the job involves travel, ensure the expectations and conditions (e.g., travel reimbursement, time off) are clearly outlined. Can you ever say “no” to a business trip? Can the employer demand you to go for a job-related trip lasting for a few weeks or more? What minimal notice will you give before your business trips? Can you book lodging according to your personal needs (e.g. choose a more pricy but quieter hotel room if you suffer from a light sleep)? 
  • Terms and Conditions for Relocation: If the job may require relocation, ensure the terms (e.g., relocation expenses, notice period) are clear and acceptable.

14. Conflicts of Interest.

Conflicts of Interest clauses are designed to prevent situations where your personal interests could interfere with your professional duties and responsibilities. These clauses are important for ensuring that you act in the best interests of your employer and avoid scenarios where your personal, financial, or business interests might conflict with your work.

  • Disclosure Obligations: Make sure you understand your obligations to disclose any potential conflicts of interest, such as side businesses or investments.

15. Exit Obligations.

Exit Obligations refer to the responsibilities and requirements that you must fulfill upon leaving your position. These obligations ensure a smooth transition for both you and the employer, protecting the interests of the company and facilitating the departure process. 

Exit obligations can vary depending on the terms of the contract and the company’s policies but generally include several key elements:

  • Return of Property: Understand your obligations to return company material and intellectual property and settle accounts before leaving.
  • Exit Interviews: Check if there’s any mandatory process you must follow when leaving the company, for instance documenting and cataloguing your work, making a backup of all your data etc.

16. Miscellaneous Clauses.

Miscellaneous Clauses refer to various provisions that don’t fall under the main categories of employment terms but are still important for defining the overall agreement between you and your employer. These clauses often address specific administrative, legal, and procedural aspects of the employment relationship. They can vary widely depending on the company, industry, and legal requirements but generally serve to clarify additional terms and conditions that apply to the employment. Some examples:

  • Entire Agreement: This clause states that the contract represents the entire agreement between you and the company, superseding any prior discussions or agreements.
  • Severability: This clause states that if one part of the contract is found to be unenforceable, the rest of the contract remains valid.

17. Amendment Clause.

An Amendment Clause specifies how you can make changes or modifications to the contract after signing it. This clause is crucial because it sets out the procedures and requirements for altering the terms of the agreement — which is a likely scenario if you are planning to stay in the company for years to come. Modifications to the Contract: Understand how you can amend the contract. Ideally, both parties should agree to any changes in writing. Handling this kind of negotiation calmly is itself a way to practice how to build career resilience over the long run.
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Lastly, How To Communicate Proposed Changes in the Job Contract to the Hiring Manager?

OK, now you have a number of points you’d like t clarify or change in your contract. What to do next?

First, prepare either an email or a written document. List and organize your comments section by section, and highlight the sections you are referring to and provide your suggested changes. Always come up with solutions and remember to justify your proposed changes.

Then, structure your communication with the Hiring Manager. Start with a polite introduction thanking the Hiring Manager for the contract and expressing your enthusiasm for the role. Maintain a positive and professional tone throughout the communication, and sandwich your comments and proposed changes to the contract between warm introduction and farewell greeting.

Also, make sure that your requests don’t sound like “My way or a high way!” Indicate your willingness to discuss the changes further in order to reach a mutually acceptable agreement. It’s in a good tone to propose a (video) call to further discuss the proposed changes point by point with the Hiring Manager.

Also, to maintain the atmosphere of mutual trust, don’t mention the involvement of your lawyer — unless the Hiring Manager mentions about the company lawyers first.

Before you get to this stage, it also helps to make sure you positioned yourself well throughout the process. See our guides on landing your dream job and on tailoring your pitch to each recruitment phase for more on that.

Best of luck! And if this contract review has you thinking bigger picture, it might be a good moment to consider how to plan your next career move.

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Please cite as:

Bielczyk, N. (August 17th, 2024). Before You Sign A Job Contract: NDAs, Non-compete Agreements, and All The Other Details in Small Print. Retrieved from https://ontologyofvalue.com/before-you-sign-a-job-contract/

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