Employment agreements can restrict where you work next, who you talk to, what you build on your own time, and whether you can keep your signing bonus if you leave. Most people sign them in 24 hours without reading them. LiabilityScore™ reads every clause and tells you what you're giving up.
What We Analyze
Broad non-compete with nationwide or industry-wide scope
A non-compete that restricts you from working in 'any competing business in the United States for 2 years' could effectively prevent you from working in your field. Courts have narrowed these, but litigation is expensive and uncertain. Ideally, a non-compete should be limited to a specific geography and to roles similar to your actual position.
IP assignment covering work done on personal time
Some IP assignment clauses assign ownership of any invention 'related to the company's current or reasonably anticipated business' — even if you built it on weekends with your own equipment. If you have side projects or freelance work, a broad IP clause is a serious risk to your existing and future intellectual property.
Signing bonus with a 2-year clawback
If you receive a $30,000 signing bonus but the clawback runs 24 months, leaving for any reason in the first two years — including a layoff that voids the agreement — could trigger a $30,000 repayment obligation. Always check whether the clawback applies on termination without cause.
Non-solicitation that covers all former colleagues
Aggressive non-solicitation clauses prevent you from hiring, recruiting, or even referring any former colleague to a new employer for 12–24 months. At a large company, this can dramatically limit your team-building ability at your next role.
Mandatory arbitration with employer-selected arbitrator
When disputes must go to arbitration with an arbitrator chosen from the employer's preferred list, the deck is structurally stacked against you. You lose the right to a jury, the right to discovery, and in some agreements, the right to appeal.
Are non-compete agreements enforceable?
Enforceability varies widely by state. California, Minnesota, North Dakota, and Oklahoma largely ban non-competes. In states where they're enforceable, courts look at geographic scope, duration, and whether the restriction is reasonably tied to legitimate business interests. An overly broad non-compete may be 'blue-penciled' — reduced in scope — but you can't count on that.
What is an IP assignment clause and why does it matter?
An IP assignment clause transfers ownership of intellectual property you create during employment to your employer. Aggressive versions assign any work you do during your employment — including personal projects built on your own time — if they're related to the company's current or reasonably anticipated business activities.
What is a clawback clause in an employment agreement?
A clawback provision requires you to return previously paid compensation — including signing bonuses, commissions, or equity — if you leave before a specified period or if certain conditions aren't met. For example, you may owe back a $50,000 signing bonus if you leave within 24 months.
What is the difference between at-will employment and a fixed-term contract?
At-will employment means either party can end the relationship at any time, for any reason (or no reason), with no contractual obligation. A fixed-term contract guarantees employment for a specified period but may include specific termination-for-cause conditions and notice requirements. Most US employment is at-will, but reading your agreement carefully is essential.
What does LiabilityScore™ flag in employment agreements?
LiabilityScore™ identifies the scope and duration of non-compete clauses, the breadth of IP assignment provisions (including moonlighting restrictions), signing bonus clawback timelines, non-solicitation restrictions on colleagues and clients, mandatory arbitration waivers, and garden leave obligations.
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