5 Employment Contract Clauses You Should Always Negotiate

You landed the job offer. The salary looks good, the role is exciting, and you're ready to sign. But before you do, take 30 minutes to read the employment contract carefully. There are clauses in almost every offer letter that you can — and should — negotiate. Here are the five that matter most.

1. Non-Compete Clause

Non-competes restrict where you can work after leaving. The worst ones are broad enough to effectively ban you from your entire industry for 1-2 years. Some states (like California) have banned non-competes entirely, but many still enforce them.

What to negotiate: Narrow the scope to specific named competitors rather than the entire industry. Shorten the duration to 6 months maximum. Limit the geography. Better yet, ask for it to be removed entirely — if the company won't budge, ask for "garden leave" (continued pay during the restricted period).

2. Intellectual Property Assignment

Most employment contracts include an "invention assignment" clause that gives the company ownership of anything you create. The problematic ones extend beyond work hours to cover side projects, open-source contributions, or ideas you have on weekends. Some even claim ownership of work you did before joining.

What to negotiate: Limit IP assignment to work created during business hours using company resources and directly related to your job duties. Attach an exhibit listing any pre-existing IP you want to exclude. Make sure your personal projects and open-source contributions are explicitly carved out.

3. Termination and Severance

Many employment contracts are "at-will," meaning the company can fire you without cause. That's standard. What's not standard is having zero severance protection. If you're a senior hire or in a specialized role, you have leverage to negotiate severance terms upfront — before you ever need them.

What to negotiate: Ask for a minimum severance package (2-4 weeks per year of service), continuation of health benefits during the severance period, and acceleration of any unvested equity. This is easiest to negotiate before you start, when the company wants you most.

4. Arbitration Clause

Many employment contracts require mandatory arbitration for all disputes, waiving your right to go to court or join a class action. Arbitration tends to favor employers — they're repeat participants who know the process, while you'd be going through it for the first time.

What to negotiate: At minimum, push for: mutual selection of the arbitrator, the company paying all arbitration costs, the right to pursue injunctive relief in court, and an exception for claims involving unpaid wages or discrimination.

5. Remote Work and Location Terms

Post-pandemic, many offers include specific terms about remote work, office requirements, and relocation. These clauses can be vague — "The Company may require Employees to work from the office as needed" could mean anything from once a month to five days a week.

What to negotiate: Get specific written terms: how many days per week in-office, what constitutes "required" office presence, relocation requirements and whether the company covers moving costs, and what happens to your role if the policy changes.

The Best Time to Negotiate

The window between receiving an offer and signing is when you have the most leverage. Once you've signed, these terms are locked in. Don't feel awkward about negotiating — companies expect it from candidates who take their contracts seriously. It's actually a positive signal.

Need help understanding what's in your employment contract? Upload it to ClausePlay for an instant breakdown of every clause with risk levels and plain-English explanations.