Before signing an employment contract, you should know what you’re agreeing to. Many people focus on salary and job title but miss the fine print that can affect future opportunities. Knowing what to watch for can save you from stressful surprises later.
One-sided non-compete clauses
California law generally bans non-compete clauses, but some employers still try to include them. These clauses restrict where and how you can work after leaving a job. Even if unenforceable, they can create confusion or discourage you from pursuing better opportunities. If you see one, it’s a sign the employer may not fully respect state law.
Overly broad confidentiality agreements
Confidentiality clauses in employment contracts protect business information, but they shouldn’t limit your right to work elsewhere. Some agreements are written so broadly that they cover skills and experience you’ve gained on your own. If a clause prevents you from using your knowledge in a future role, it’s too restrictive. Watch for vague language that defines “confidential information” too widely.
Mandatory arbitration clauses
Many contracts include arbitration clauses that require you to settle disputes privately instead of in court. While arbitration can be faster, it often favors employers. You may lose the right to a jury trial or to appeal a decision. If you spot a mandatory arbitration clause, consider how it could affect you if problems arise.
Unclear compensation or bonus terms
Some contracts include performance bonuses or commissions without explaining how they’re calculated or paid. This lack of clarity can lead to disputes later. Make sure every form of pay—base salary, bonuses, and benefits—is described in specific terms. If anything feels uncertain, it’s a red flag that could cost you money down the road.
Protecting yourself through awareness
Reading your contract carefully helps you understand your rights and responsibilities before signing. Red flags often hide in small details, so take time to review each section. Understanding California’s employment laws can help you avoid unfair terms and start your new role on solid ground.