Tech Employment Agreements: What Software Engineers Need to Know

You passed the technical interviews, negotiated your comp package, and got the offer you wanted. Then HR sends over a document — 15 to 30 pages of legal text — and tells you your start date is contingent on signing it.

This is your employment agreement, and it governs far more than your salary. It determines who owns the code you write (and possibly the code you write outside of work), what you can do after you leave, what information you can never share, and what happens to your equity if you're terminated.

Most engineers sign without reading carefully. That's understandable — the language is dense, you're excited about the role, and pushing back feels like it could jeopardize the offer. But understanding what you're agreeing to takes less time than you think, and the clauses in this document can follow you for years after you leave.

Here's what matters most.

Intellectual Property Assignment

This is the clause that matters most to engineers and it's the one most people misunderstand.

Almost every tech employment agreement includes an invention assignment clause. The standard version says something like: all inventions, works of authorship, and intellectual property created by the employee in the scope of employment and related to the company's business are assigned to the company.

That's generally reasonable. The company is paying you to build things for them.

Where it gets dangerous is when the assignment clause is broader than the job. Some agreements capture all IP created "during the term of employment" — which could include your side projects, your open source contributions, your blog posts, and anything else you create while employed, even on your own time with your own equipment.

What to look for:

Is the assignment limited to work within the "scope of employment" or related to the company's "current or anticipated business"? Or does it capture everything you create during the employment period regardless of connection to the company?

Is there a pre-existing IP schedule or exhibit where you can list things you've already built that are excluded from the assignment? Most agreements include this — make sure you fill it out.

Does the agreement reference state law protections? California (Labor Code Section 2870), Delaware, Illinois, Minnesota, Washington, and North Carolina all have statutes limiting how broad these clauses can be. If you work in one of these states, your agreement may contain language that's technically broader than what's enforceable — but you should understand the boundaries.

For engineers with active side projects, open source contributions, or startup ideas: this clause is worth reading very carefully.

Non-Compete Clauses

Non-competes in tech have gotten more attention in recent years, and for good reason. A broad non-compete could prevent you from joining a competitor — which in tech could mean most of the companies you'd want to work for.

If you work in California, non-competes are generally unenforceable. Period. Even if your agreement contains one, California law voids it with very limited exceptions.

For engineers in other states, enforceability depends on reasonableness: duration (6-12 months is more defensible than 2+ years), geographic scope (nationwide restrictions are harder to enforce), and activity scope (preventing you from working for a "competitor" is different from preventing you from working in "the technology industry").

Even in states where non-competes are enforceable, they're evaluated differently based on your seniority and access to trade secrets. A non-compete for a VP of Engineering with knowledge of the company's entire product roadmap is treated very differently than one for a junior software developer.

What to look for: duration, geographic scope, definition of "competitor," and whether the restriction applies if the company terminates you (some agreements waive the non-compete if you're laid off — many don't).

Equity and Vesting

Your offer letter probably specifies your equity grant — RSUs, stock options, or both. Your employment agreement specifies what happens to that equity in various scenarios.

What to look for:

What's the vesting schedule? The standard tech vesting schedule is 4 years with a 1-year cliff, meaning you get nothing if you leave before 12 months, then vest monthly or quarterly after that. But this varies — some companies use 3-year schedules, front-loaded vesting, or back-loaded vesting.

What happens to unvested equity if you're terminated without cause? Some agreements accelerate vesting on termination (partial or full). Most don't. Understand which scenario you're in.

Is there a clawback on your signing bonus? Many tech offers include a signing bonus with a clawback provision — if you leave within 12-24 months, you owe it back. Know the timeline and whether involuntary termination triggers the clawback.

Does the agreement reference the company's equity plan document? Your employment agreement usually incorporates the equity plan by reference. The equity plan document contains the detailed rules about vesting acceleration, exercise windows for options, and post-termination treatment. Ask for a copy if you haven't received one.

Confidentiality and Non-Disclosure

Every tech employment agreement includes a confidentiality clause. These are standard and generally reasonable — the company has trade secrets and proprietary information that you'll have access to, and they need to protect it.

What to watch for: the scope of "confidential information" and the duration of the obligation. A well-drafted clause defines confidential information specifically (source code, product roadmaps, customer data, financial projections) and has a reasonable post-employment duration (2-3 years is typical). An overly broad clause defines confidential information as "any information learned during employment" and lasts indefinitely — which could theoretically restrict your ability to use general skills and knowledge in your next role.

Also look for whether the clause includes a carve-out for information that becomes publicly available, was already known to you before employment, or was independently developed. These carve-outs are standard and important.

At-Will Employment and Termination

Most tech employment agreements in the US are at-will, meaning either side can end the relationship at any time, for any reason, with or without notice. This is standard.

What matters is what happens upon termination. Look for:

Is there a severance provision? What triggers it? Does it require you to sign a release of claims?

Do your post-employment obligations (non-compete, non-solicitation) apply regardless of how the termination occurs? Some agreements waive these restrictions if the company terminates you without cause.

What's the exercise window for stock options post-termination? The standard is 90 days, but some companies offer extended exercise windows of 1-10 years. This matters enormously if your options are underwater when you leave but the stock later recovers.

Mandatory Arbitration

Many tech employment agreements include a mandatory arbitration clause with a class action waiver. This means if you have a dispute with the company — wage issues, discrimination claims, wrongful termination — you resolve it through private arbitration rather than court, and you can't join a class action lawsuit with other employees.

This became a significant issue in tech after employee walkouts at several major companies. Some companies have since carved out harassment and discrimination claims from mandatory arbitration. Check whether your agreement has these carve-outs.

Check Your Agreement

If you've received a tech employment agreement and want to understand what's in it, paste it into dott.legal for a free AI analysis in 30 seconds. The tool evaluates every clause discussed above and gives you a risk score.

For senior roles with significant equity, complex non-competes, or IP concerns around side projects, the attorney-validated review ($349, 24-hour turnaround) provides specific analysis with contract language recommendations.