Check Your Employment Contract with AI

# Employment Contract Review: Senior Software Engineer Role

Below is a section-by-section analysis based on the terms you've shared. Note that I'm working from a summary rather than the full contract text, so some issues may require verification against the actual document language.

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## Compensation

- **[Moderate] Base salary benchmarking**
 *"$165k base"*
 $165k is reasonable but potentially below market for a Senior SWE at a Series B startup, especially in high-cost metros (SF, NYC, Seattle) where comparable roles often pay $180k–$220k. Benchmark against levels.fyi and Pave data for your location before signing.

- **[Moderate] No mention of bonus or performance review cadence**
 The summary doesn't reference a signing bonus, performance bonus, or annual review/raise structure. Without a documented review cycle, salary increases become discretionary and easy to defer.

- **[Critical] Equity grant is unusually small for a Series B senior engineer**
 *"0.15% equity vesting over 4 years with a 1-year cliff"*
 For a Senior SWE at Series B, 0.15%–0.30% is the typical range, so you're at the **low end**. More importantly, the summary is missing key details:
 - Is this ISOs, NSOs, or RSUs?
 - What's the strike price and current 409A valuation?
 - What's the total preferred liquidation stack ahead of common shareholders? (At Series B this can be significant and materially dilutes what your equity is actually worth.)
 - Is there an **early exercise** option?
 - What's the **post-termination exercise window**? A 90-day window is standard but punitive; 7–10 years is increasingly common and much more employee-friendly.

- **[Moderate] No acceleration on change-of-control or termination without cause**
 Standard protective language would be "double-trigger acceleration" (acceleration if the company is acquired *and* you're terminated without cause within 12 months). Without it, an acquirer can fire you and cancel unvested equity.

---

## Termination

- **[Critical] At-will employment paired with 30-day mutual notice is internally inconsistent**
 *"at-will employment clause" + "mutual 30-day notice period"*
 At-will means either side can terminate immediately for any legal reason. A 30-day notice contradicts that. In practice, this usually cuts against the employee: the company can still fire you immediately (paying 30 days in lieu or not at all, depending on wording), but *you* are contractually bound to give 30 days, which can jeopardize your next job's start date and trigger breach claims.

- **[Critical] No severance provision mentioned**
 For a senior role, negotiate at least 2–3 months' severance for termination without cause, ideally with COBRA contribution. Without it, you have zero financial cushion if laid off—a real risk at a Series B startup.

- **[Moderate] No definition of "Cause" mentioned**
 "Cause" should be narrowly defined (e.g., conviction of a felony, gross misconduct, material breach after notice and cure). A vague or absent definition lets the employer label anything as "for cause" to avoid severance and accelerate equity forfeiture.

- **[Moderate] No "Good Reason" resignation clause**
 You should be able to resign for "Good Reason" (material pay cut, relocation, significant demotion) and receive the same severance as a without-cause termination.

---

## Non-Compete & Restrictive Covenants

- **[Critical] The non-compete is almost certainly overbroad and potentially unenforceable**
 *"12-month non-compete covering any company in the AI or SaaS space in North America"*
 This is a significant red flag:
 - **"AI or SaaS space"** covers essentially the entire modern tech industry. You'd be unable to work at Google, Microsoft, Amazon, Meta, or almost any startup.
 - **"North America"** is a geographic overreach, especially for remote work.
 - **12 months** without pay during the restriction period is harsh.
 - **Jurisdiction matters enormously**: California, Minnesota, North Dakota, and Oklahoma ban most non-competes outright. Washington, Illinois, Massachusetts, Colorado, and others have income thresholds or narrow enforceability. The FTC's non-compete ban was struck down in 2024, but state laws are tightening.
 Even if unenforceable, it can **chill your job search**—future employers may decline to hire you rather than litigate.

- **[Moderate] No mention of non-solicitation scope**
 Non-solicits for customers and employees are more commonly enforced than non-competes. Push for narrow language (only customers you personally worked with, only employees you directly managed, 12 months max).

- **[Moderate] No "garden leave" / paid non-compete period**
 If they insist on a non-compete, they should pay your full base salary during the restriction period. Many states now require this.

---

## IP & Confidentiality

- **[Critical] IP assignment "during the term of employment" is overly broad**
 *"assigns all IP I create during the term of employment to the company"*
 Taken literally, this sweeps in:
 - Weekend side projects unrelated to the company's business
 - Open source contributions
 - Pre-existing IP you bring with you
 - Inventions made on personal time with personal resources
 Most states (including CA Labor Code §2870, WA RCW 49.44.140, IL 765 ILCS 1060) **legally carve out** personal inventions made without company resources and unrelated to the business. Your contract should include this statutory carve-out explicitly.

- **[Critical] No "Prior Inventions" schedule mentioned**
 Before signing, list every side project, open source repo, patent, or invention you created **before** starting. Anything not listed can be claimed by the company later. This is a quick but essential protection.

- **[Moderate] Confidentiality obligations likely extend indefinitely**
 Verify the contract doesn't impose perpetual confidentiality on information that becomes public or that you independently develop. Also ensure it carves out the right to discuss wages (NLRA-protected) and to report violations to government agencies (

# Employment Contract Review – Senior Software Engineer

**Disclaimer:** This review is educational and not legal advice; consult a qualified employment attorney in your jurisdiction before signing.

---

## Compensation

### Issue: Base Salary (No Explicit Red Flags)
- **Detail:** $165k base stated.
- **Rating:** [Minor]
- **Analysis:** Base is reasonable for a Series B Senior SWE role in most markets, but confirm this aligns with your geography and market comparables (Levels.fyi, Blind, Carta). No protection against unilateral reduction without cause.

---

## Equity

### Issue #1: Below-Market Equity Grant for Senior Role
- **Exact Language:** "0.15% equity vesting over 4 years with a 1-year cliff"
- **Rating:** [Moderate]
- **Plain English:** You receive 0.15% of the company's fully diluted equity. You won't own any of it for 12 months (the cliff); after that, you vest 1/48th monthly. This is at the lower end for a senior engineering hire at Series B.
- **Practical Impact:** 
  - Series B senior engineers typically receive 0.25%–0.75% depending on stage, role, and market.
  - If the company raises multiple future rounds, your ownership is diluted unless you participate in future funding (often not guaranteed for non-executives).
  - At a modest exit ($100M), 0.15% = $150k; at a strong exit ($500M), = $750k. A 2–3x increase in grant size materially changes outcomes.
- **Questions to Ask:**
  - What is the current cap table, fully diluted share count, and post-money valuation?
  - Is this pool refresher eligible (additional grants after vesting begins)?
  - Will I have pro-rata rights in future rounds?

### Issue #2: 1-Year Cliff with No Vesting Cliff Protection
- **Rating:** [Moderate]
- **Plain English:** If you're laid off, fired without cause, or constructively dismissed in months 1–12, you receive zero equity. This is standard but harsh.
- **Practical Impact:**
  - A startup might cut headcount at month 11; you walk away with nothing despite 11 months of contribution.
  - Early-stage companies frequently fail or pivot, reducing equity value to zero.
- **Negotiation Point:** 
  - Request acceleration (e.g., 50% acceleration of unvested equity upon involuntary termination without cause).
  - Alternatively, reduce cliff to 6 months for a senior hire.

---

## Termination

### Issue #1: At-Will Employment with Minimal Severance Clarity
- **Exact Language:** "at-will employment clause" (no severance terms stated in your summary)
- **Rating:** [Critical]
- **Plain English:** Either party can terminate you at any time for any reason (or no reason) with statutory minimum notice. You have no guaranteed severance, notice period, or severance package unless separately detailed.
- **Practical Impact:**
  - You can be let go with zero severance on day 1, despite upending your life to join a startup.
  - At-will is standard in most U.S. states, but severance can soften the blow.
  - No severance means sudden income loss during job search (typically 3–6 months for senior roles).
- **Questions:**
  - Is severance mentioned elsewhere in the offer letter or employee handbook?
  - What happens if the company is acquired, restructures, or runs out of funding?

### Issue #2: Mutual 30-Day Notice Period (Asymmetric Risk)
- **Exact Language:** "mutual 30-day notice period"
- **Rating:** [Moderate]
- **Plain English:** You must give 30 days' notice to resign; the company must give you 30 days' notice before terminating you (in theory).
- **Practical Impact:**
  - At-will law typically allows termination on day 1, so a 30-day notice "requirement" is weaker than it sounds.
  - A startup could give notice and then cut you (or your project) immediately, making the final 30 days unproductive or hostile.
  - 30 days is tight for senior engineers to land a new role; 60 days or 90 days is more realistic.
  - You're locked in for 30 days if you want to leave, but the company can likely terminate you immediately for cause (not defined).
- **Negotiation Point:**
  - Clarify that 30-day notice is non-waivable and severance accrues if company terminates without cause.
  - Request 60 days' notice for the company; 30 days for you is fair if severance is 1–2 weeks per year of service.

---

## Non-Compete & Restrictive Covenants

### Issue #1: Overbroad Non-Compete (Primary Red Flag)
- **Exact Language:** "12-month non-compete covering 'any company in the AI or SaaS space in North America'"
- **Rating:** [Critical]
- **Plain English:** After you leave (voluntarily or involuntarily), you cannot work for any competitor in AI or SaaS across North America for 12 months.
- **Practical Impact:**
  - **Severity:** This is extremely broad. "Any company in AI or SaaS" could include thousands of employers (OpenAI, Anthropic, Microsoft, Google, Stripe, Notion, Datadog, dozens of Series A–C startups, enterprise software vendors, etc.).
  - **Geographic Scope:** North America (U.S., Canada, Mexico) is large but reasonable. However, if you need to relocate for a new job, you're barred from most major tech hubs (Bay Area, NYC, Seattle, Toronto).
  - **Enforceability:** Varies sharply by jurisdiction:
    - **California:** Non-competes are largely unenforceable (Business & Professions Code § 16600). Even if not litigated, it may discourage employers from hiring you.
    - **New York, Texas, Washington:** More enforceable if "reasonable in scope, time, and geography," but 12 months + "any AI or SaaS" is likely overreaching.
    - **Other states (MA, IL, CO):** Medium enforceability with proportionality tests.
  - **Career Impact:** You cannot pursue senior roles at 95% of growth-stage tech companies for a year. This is career-limiting and unusually restrictive for non-executive talent.
  - **Leverage at Exit:** If acquired, the buyer will scrutinize this; if not acquired, it may chill your ability to fundraise or recruit later (investors see restrictive covenants as red flag).

### Issue #2: Vague Definition of "During Term"
- **Rating:** [Moderate]
- **Plain English:** Non-competes often start the day you leave, but some trigger during notice periods or include "tail" periods. Clarify the exact trigger date.
- **Negotiation Point:**
  - Should say: "Non-compete begins on the Employee's final day of employment and extends for 12 months thereafter."

### Issue #3: No Non-Solicitation or IP Restriction Carve-Out
- **Rating:** [Minor]
- **Plain English:** We'll cover IP below, but if the non-compete is unenforceable, a non-solicitation (can't recruit employees) is often more defensible and narrower. Consider trading a narrower non-solicitation for elimination of the non-compete.

### Suggested Redline for Non-Compete:

**Instead of:** "any company in the AI or SaaS space in North America"

**Propose:**
- **Option A (Narrow):** "direct competitors of the Company offering materially similar products/services in the same geographic markets where the Company operates, for 6 months."
- **Option B (Conditional):** "if Employee is terminated without Cause or without Good Reason, this covenant does not apply. If Employee voluntarily resigns without Good Reason, non-compete applies to direct competitors only for 6 months."
- **Option C (California/Unenforceable):** "Non-compete is unenforceable under California law (if applicable); parties agree to rely on IP assignment, confidentiality, and non-solicitation covenants instead."

---

## IP & Confidentiality

### Issue #1: Overly Broad IP Assignment ("During Term")
- **Exact Language:** "assigns all IP I create 'during the term of employment' to the company"
- **Rating:** [Moderate to Critical]
- **Plain English:** Any intellectual property (code, inventions, patents, software, designs, even ideas) you create while

# Employment Contract Review for Employee

*Not legal advice; this is a practical issue-spotting review based only on the terms you provided.*

## Overall Take

This offer has several **major employee-side risks**, especially for a **Senior Software Engineer at a Series B startup**:

- the **12-month non-compete** is extremely broad and likely one of the biggest red flags,
- the **equity terms are too vague** to assess real value,
- the **IP assignment language may be overbroad** depending on how it is drafted,
- the **30-day notice period** may restrict your ability to leave quickly while the company can still rely on at-will language unless the contract is very clear.

For a startup offer, I would especially want clarity on:
1. **equity mechanics and acceleration**,  
2. **termination treatment**,  
3. **scope of the non-compete**, and  
4. **carve-outs for prior inventions / side projects / open-source work**.

---

# Compensation

## Base Salary

- [Minor] **Base salary only identified as “$165k base”**
  - **Practical impact:** This tells you the cash comp, but not whether there are annual reviews, bonus opportunities, merit increases, or compensation adjustment timing.
  - **What to check / negotiate:** Ask whether there is:
    - annual salary review,
    - target bonus,
    - signing bonus,
    - promotion review timing,
    - compensation band for the role.

## Equity

- [Critical] **“0.15% equity vesting over 4 years with a 1-year cliff” is incomplete and potentially misleading**
  - **Practical impact:** “0.15%” sounds meaningful, but without details it is impossible to know what you are really getting. At startups, equity can vary dramatically in value and can be diluted.
  - **Missing items you should request:**
    - Is this **stock options**, **RSUs**, or **restricted stock**?
    - What is the **number of shares/units**?
    - What is the company’s **current fully diluted capitalization** used to calculate the 0.15%?
    - Is the 0.15% measured **as of grant date** only?
    - What is the **exercise price/strike price**?
    - Is there a **409A valuation**?
    - What is the **vesting start date**?
    - What happens on **termination**?
    - How long do you have to exercise options after leaving?
  - **Why this matters:** Startups often quote a percentage that can shrink through future financings. Also, if these are options with a short post-termination exercise window, you could lose them quickly after departure.

- [Critical] **No mention of acceleration on termination or change in control**
  - **Practical impact:** If the company is acquired or terminates you shortly before a sale, you may get little or no value from your equity.
  - **What to negotiate:** At minimum, ask for:
    - **double-trigger acceleration** (if the company is sold and you are terminated or materially downgraded within a set period),
    - possibly some **single-trigger acceleration** for a portion of unvested equity if the role is senior enough.
  - **Employee-friendly position:** 25%–50% acceleration on change in control, or full/partial double-trigger acceleration.

- [Moderate] **No mention of post-termination exercise period**
  - **Practical impact:** If your grant is options, many plans give only **90 days** after termination to exercise vested options. That can require a large cash payment on short notice or cause forfeiture.
  - **What to negotiate:** Extended exercise period, ideally:
    - **12 months**, or
    - full option term for good leavers if the company will allow it.

- [Moderate] **No dilution / refresh discussion**
  - **Practical impact:** Your percentage may decline in future rounds, and if you stay a long time, your original grant may become less competitive.
  - **What to negotiate:** Ask about:
    - refresh grants,
    - performance-based additional grants,
    - equity review schedule.

---

# Termination

## At-Will Employment

- [Moderate] **“at-will employment clause”**
  - **Practical impact:** The company can generally terminate you at any time, with or without cause, subject to applicable law. That is common in the U.S., but it matters because your other obligations may be much stricter than the company’s obligations to you.
  - **Why this matters here:** The contract also includes a notice period and a non-compete, so you may be heavily restricted even though your own job security is limited.

## Notice Period

- [Moderate] **“mutual 30-day notice period” may conflict with at-will employment or operate mainly against you**
  - **Practical impact:** This sounds balanced, but in practice:
    - the company may still terminate you immediately and pay salary in lieu, put you on garden leave, or cut off duties,
    - you may be expected to stay 30 days even if a new employer wants you to start sooner.
  - **Questions to raise:**
    - Is either party allowed to give **pay in lieu of notice**?
    - Can the company waive your duties during notice?
    - If you resign, can the company accelerate your departure but still pay you through the notice period?
    - Does the 30-day requirement apply even under at-will employment?
  - **Negotiation point:** If they want notice, make sure it is truly mutual and that you are paid if they cut the period short.

- [Moderate] **No severance protection mentioned**
  - **Practical impact:** If the company terminates you without cause, there appears to be no guaranteed severance, benefits continuation, or accelerated vesting.
  - **What to negotiate:** Even a modest package helps:
    - 2–3 months base salary,
    - COBRA/benefits support for that period,
    - vesting through the severance period or partial acceleration,
    - severance if terminated without cause or if you resign for good reason after a material pay cut or role reduction.

- [Moderate] **No definition of “cause” or “good reason” provided**
  - **Practical impact:** If the agreement uses those concepts anywhere else, undefined terms favor the employer and create uncertainty.
  - **What to negotiate:** Ask for narrow, objective definitions:
    - “cause” should be serious misconduct and include notice/cure where appropriate,
    - “good reason” should cover material compensation cuts, title/status reduction, forced relocation, or substantial duty changes.

---

# Non-Compete & Restrictive Covenants

## Non-Compete

- [Critical] **“12-month non-compete covering ‘any company in the AI or SaaS space in North America’” is exceptionally broad**
  - **Practical impact:** This could block you from working for a huge portion of the tech market for a full year after leaving. For a Senior Software Engineer, that could severely damage your ability to earn a living.
  - **Why it is a red flag:**
    - **12 months** is long,
    - **AI or SaaS** captures an enormous percentage of modern software employers,
    - **North America** is a massive geographic scope,
    - it appears not limited to direct competitors, your actual area of work, or customers/products you touched.
  - **What to negotiate:** Best outcome is **delete it entirely**. If they refuse:
    - limit it to **direct competitors**,
    - limit it to products/business lines you actually worked on,
    - reduce duration to **3–6 months maximum**,
    - narrow geography to places where you actually worked or had strategic exposure,
    - clarify it only applies if you are terminated for cause or resign to join a named direct competitor,
    - require compensation during the restricted period if enforceable in the relevant jurisdiction.

- [Critical] **Possible enforceability issues depending on state law**
  - **Practical impact:** In some states, especially California and increasingly elsewhere, employee non-competes are restricted or largely unenforceable. But even an unenforceable clause can still create leverage, fear, and legal expense.
  - **What to ask:** Which state’s law governs the contract? Where will you work? If you are in a state hostile to non-competes, ask them to remove it entirely.

## Missing Non-Solicit / Customer/Employee Restrictions

- [Minor] **No separate non-solicit term mentioned**
  - **Practical impact:** Sometimes employers will agree to drop a non-compete if they can keep a narrower non-solicit. If this agreement currently only has the broad non-compete, there may be room to replace it with something more reasonable.
  - **Negotiation strategy:** Offer a limited non-solicit instead of a broad non-compete:
    - no soliciting employees you worked with closely for 6–12 months,
    - no soliciting customers you personally serviced or learned confidential plans about.

---

# IP & Confidentiality

## IP Assignment

- [Critical] **“assigns all IP I create ‘during the term of employment’ to the company” may be too broad**
  - **Practical impact:** Depending on wording, this could sweep in:
    - personal side projects,
    - inventions unrelated to the company,
    - open-source contributions,
    - work developed on your own time using your own equipment.
  - **Why this is risky:** As written in your summary, it does **not** appear limited to:
    - work created within the scope of employment,
    - work using company resources,
    - work related to the company’s business or anticipated R

## Compensation
- **[Moderate]** Equity vests over 4 years with a 1-year cliff: "0.15% equity vesting over 4 years with a 1-year cliff." This means you get nothing if you leave before 12 months, then 25% at month 12 and the rest monthly. Practical impact: High risk in a startup where you might leave early; common but negotiate for accelerated vesting on change of control or no cliff.
- **[Minor]** No mention of bonuses, sign-on, or salary reviews: Contract silent. Practical impact: Locks you into $165k base without upside; startups often add performance bonuses (10-20%)—ask for clarity.

## Termination
- **[Moderate]** At-will employment with mutual 30-day notice: "at-will employment clause" and "mutual 30-day notice period." At-will lets employer fire you anytime without cause, but mutual notice binds *you* too—if you quit without 30 days, they could sue for breach. Practical impact: Limits your flexibility to jump ship quickly for better offers.
- **[Critical]** No severance or COBRA coverage: Contract silent. Practical impact: If fired without cause, you get zero payout or health continuation help—standard for employees to negotiate 3-6 months base + equity acceleration.

## Non-Compete & Restrictive Covenants
- **[Critical]** 12-month non-compete: "12-month non-compete covering 'any company in the AI or SaaS space in North America.'" This bans working anywhere in huge, booming fields across an entire continent. Practical impact: Could block 90% of job options post-exit; often unenforceable if too broad, but lawsuits cost time/money to fight.
- **[Moderate]** No details on non-solicit or NDA scope: Implied but not specified. Practical impact: Could restrict poaching colleagues or clients forever; push for time/geography limits.

## IP & Confidentiality
- **[Critical]** All IP assignment during employment: "assigns all IP I create 'during the term of employment' to the company." Covers *anything* you invent/code, even on personal time with your tools. Practical impact: Startup could claim your side projects, open-source, or hobby apps—huge for engineers.
- **[Minor]** No carve-outs for prior IP: Silent. Practical impact: They might claim ownership of your pre-existing code/tools; get a license-back clause.

## Benefits
- **[Moderate]** No details on health, 401k, PTO, etc.: Contract silent. Practical impact: Startups vary wildly—could mean minimal PTO (e.g., "unlimited" that means zero) or weak benefits; confirm 4+ weeks PTO, full health coverage.
- **[Minor]** No remote work or expense policy: Silent. Practical impact: Assumes office; negotiate hybrid/remote if needed.

## Other Concerns
- **[Moderate]** Series B startup risks: No mention of financing, dilution protection, or acceleration on acquisition. Practical impact: Equity could dilute to worthless; add double-trigger acceleration (termination post-sale).
- **[Minor]** No arbitration or dispute resolution: Silent. Practical impact: Default to costly court; prefer arbitration for speed/privacy.
- **[Minor]** Missing definitions (e.g., "term of employment," "company"). Practical impact: Ambiguity favors employer in disputes.

**Top Negotiation Priorities** (in order):
1. **Narrow non-compete**: Suggest: "Non-compete limited to direct competitors in [specific city/state] for 6 months."
2. **Limit IP assignment**: Suggest: "IP created during employment using Company resources and related to Company business; employee retains all other IP."
3. **Add severance**: Suggest: "On termination without Cause: 6 months base salary, full equity acceleration, and 12 months COBRA."
4. **Remove employee notice period**: Suggest: "Notice mutual only for resignation; employer provides 30 days or pay in lieu."
5. **Equity improvements**: Suggest: "No 1-year cliff; 1-year acceleration on change of control."
6. **Confirm benefits**: Ask: "Provide details on PTO (min 20 days), health premiums, 401k match, and remote policy."

*This is not legal advice; consult a licensed attorney in your jurisdiction for personalized review.*