Tech Employment Contracts: What to Know Before Signing
Tech employment contracts have unique provisions that can significantly affect your career and finances. Stock options, IP assignment, and restrictive covenants deserve careful attention before you sign.
Key Clauses in Tech Employment Contracts
- IP and invention assignment: Most tech employers require you to assign all inventions created during employment. Review whether this covers only work-related inventions or extends to personal side projects. Look for a carve-out for prior inventions and personal projects.
- Equity compensation: Stock options, RSUs, and equity grants come with vesting schedules, exercise windows, and tax implications. Pay attention to the cliff period (typically one year), acceleration on termination, and post-departure exercise windows.
- Non-compete and non-solicitation: Some states severely limit these (California bans most non-competes). Even in states where they are enforceable, negotiate for narrow scope and short duration.
- Confidentiality and trade secrets: These are standard but review the definition of "confidential information" to make sure it does not overreach into general industry knowledge.
- At-will employment and severance: Most tech employment is at-will. Consider negotiating a severance package or minimum notice period, especially at the senior level.
Red Flags
- IP assignment that covers all work during employment, including personal projects on personal time and equipment
- Post-termination exercise windows shorter than 90 days for stock options
- Single-trigger vs. double-trigger acceleration on equity
- Non-competes in states where they are difficult to enforce
- Mandatory arbitration with no carve-outs
When to Consult a Lawyer
If you are joining a startup with complex equity packages, negotiating a senior role, or concerned about IP assignment scope, consider having an employment attorney review your offer. The cost of a contract review is small compared to the potential value at stake.
This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance specific to your situation.