How to Read an Employment Agreement in 15 Minutes

Employment agreements are not designed to be read by the people signing them. They're long, dense, and full of cross-references to other sections and defined terms. But you don't need to read every word. You need to read the right sections in the right order, and know what one question each section is answering. Here's a focused guide to getting through your employment agreement efficiently and coming out the other side actually understanding what you signed.

Start With the Definitions

Before you read any substantive provision, flip to the definitions section — usually near the front or referenced with capitalized terms throughout. The two definitions that matter most are "Confidential Information" and "Inventions."

Confidential Information: How broad is it? Does it cover general industry knowledge, or is it limited to specific categories of sensitive business information? The broader the definition, the more constrained your post-employment communications will be.

Inventions: How does the agreement define what you're assigning? Does it include only things "conceived during working hours using company resources," or does it capture anything "related to the company's reasonably anticipated business" regardless of when or where you created it?

A broad definition of Confidential Information combined with a broad definition of Inventions signals an aggressive approach to IP protection. A more narrowly drawn set of definitions is more employee-favorable. You can judge a lot about an agreement by these two definitions alone.

For more detail on invention assignment: dott.legal/blog/piia-agreement-explained.

At-Will vs Fixed Term

Find the section on term and termination. Is this an at-will employment arrangement or a fixed-term contract?

At-will means either party can end the relationship at any time without legal liability for the termination itself. Most tech employment agreements in the US are at-will.

Fixed-term means you're employed for a specific period (e.g., 12 months), and ending the arrangement early may involve breach-of-contract liability for the terminating party.

The distinction matters for understanding what protections and obligations attach to the end of employment. The at-will answer also interacts with the non-compete and confidentiality provisions that survive termination — at-will doesn't mean your post-employment restrictions disappear.

Compensation and Equity

Confirm that the compensation terms in the employment agreement match the offer letter. Sometimes the offer letter summarizes different numbers than appear in the formal agreement. Discrepancies should be resolved before signing.

For equity, find the equity section and understand: what type of equity (RSU or option), the total grant size, the vesting schedule (including cliff date), and — critically — what happens to unvested equity on termination. The answer is almost always "forfeited," but the specific conditions (resignation vs. termination without cause vs. termination for cause) may create differences worth knowing.

For a detailed guide to RSU vesting: dott.legal/blog/rsu-vesting-employment-agreement.

IP Assignment and the PIIA

Find the IP assignment section. Key question to answer: is IP assignment limited to things I create using company resources during working hours, or does it extend to personal projects on my own time that relate to the company's business?

If the agreement refers to a separate PIIA (Proprietary Information and Inventions Agreement), that document governs the IP assignment and is the one to review carefully. The prior inventions schedule is the most important action item — fill it out with anything you own and want to keep before signing.

For a full breakdown of PIIA provisions: dott.legal/blog/piia-agreement-explained.

Non-Compete: Check Your State First

Before reading the non-compete section, know your state's enforceability rules. In California, the non-compete is almost certainly void — Business and Professions Code Section 16600 makes them unenforceable against California employees as a matter of public policy. See: dott.legal/blog/non-compete-california.

In Washington, Texas, New York, Illinois, and Colorado, non-competes can be enforceable subject to specific requirements. Check your state's income threshold (Washington requires ~$100k+, Illinois requires $75k+, Colorado requires ~$123k+ for standard non-competes).

If your state enforces non-competes, read the section carefully for: duration (how many months?), geographic scope (nationwide? regional?), scope of restricted activity (all competitors? specific competitors? related to your specific role?), and what triggers the restriction (all departures, or only voluntary resignation?).

Confidentiality Duration and Scope

Find the confidentiality section and answer two questions:

1. What is covered? Read the definition of Confidential Information again with the specific context of the confidentiality obligation. Is everything you learned during employment covered, or are there specific categories?

2. How long does it last? Look for the post-employment duration. Trade secrets are generally protected indefinitely under state and federal law. For other categories of confidential information, the agreement often specifies a period (commonly 2-5 years). Look for the word "survive" near the confidentiality section — most agreements include a survival clause.

For a detailed breakdown of confidentiality obligations: dott.legal/blog/confidentiality-clause-employment.

Termination and Severance

Find the termination section. Identify: does the agreement provide any severance on termination without cause? What happens to equity on different types of termination (resignation, without cause, for cause)? Are there any notice requirements?

For signing bonus provisions, find the clawback language — it may be in the offer letter rather than the main agreement. The key question: does the clawback apply on termination without cause (layoff) or only on voluntary resignation?

For a guide to signing bonus clawbacks: dott.legal/blog/signing-bonus-clawback.

Dispute Resolution

The last section to review is dispute resolution. Is there a mandatory arbitration clause? What rules govern (JAMS? AAA?)? Is there a class action waiver? What state's law governs?

For most employees, the arbitration clause is non-negotiable at the company level — but understanding it matters for knowing what your options are if you ever have a dispute.

For a detailed breakdown of arbitration clauses: dott.legal/blog/mandatory-arbitration-employment.

And for guidance on severance agreements: dott.legal/blog/severance-agreement-guide.

The Bottom Line

Reading an employment agreement doesn't require legal training — it requires reading the right sections in a focused order and knowing what question each section answers. Before signing your employment agreement, paste it into dott.legal for a free AI risk analysis that automatically flags the clauses most likely to affect you. For situations involving significant equity, a meaningful non-compete, or prior IP you want to protect, attorney-validated review is $349 with 24-hour turnaround.