1. Compensation, bonus, and the strings attached to it
The headline salary is the easy part. The details around it decide what you actually keep. A signing or relocation bonus often comes with a clawback: leave before a set date — usually 12 or 24 months — and you repay all or part of it, sometimes out of your final paycheck. And a bonus described as "discretionary" or "target" is not a promise; the company can pay less, or nothing, without breaching the offer.
Watch for: Signing or relocation bonuses that are "repayable" if you resign within a period, a bonus called "discretionary" or "target" with no formula, and pay tied to a plan document you have not seen.
Ask for: A copy of any bonus or commission plan before you sign, the exact clawback trigger and repayment amount in writing, and — if you can — a shorter repayment window or a pro-rated payback.
2. Equity — vesting, the cliff, and what happens when you leave
Equity is usually granted in a separate plan and agreement, not spelled out in the offer letter, so read both. Most grants vest over four years with a one-year cliff, meaning you get nothing if you leave in the first twelve months. What happens after you leave matters just as much: some private companies keep a right to repurchase vested shares, and stock options typically give you only a short window (often 90 days) to exercise after you go — after which they expire. Whether a grant is an ISO or an NSO changes how it is taxed, and early-exercise provisions can change the timing of that tax.
Watch for: A long cliff or back-loaded vesting, company repurchase rights over vested shares, a short post-termination exercise window, and grants promised in the offer but not yet approved by the board.
Ask for: The full equity plan and grant agreement, the strike price and current valuation, the vesting schedule and post-termination exercise window in writing, and clarity on whether the grant is an ISO or NSO. For anything material, have a tax professional look at it.
3. IP assignment and whether you can work on the side
Most offers include an invention-assignment agreement that hands the company the rights to work you create. The question is how wide it reaches. Broad language can sweep in side projects and things you build on your own time, and without a carve-out it can look like your pre-existing inventions belong to the employer too. Many states limit how far these clauses can go for work done entirely on your own time without company resources, but the contract language still governs day to day.
Watch for: Assignment of "any and all inventions" with no time or resource limit, no schedule to list your prior inventions, and moonlighting or outside-activity clauses that bar side projects or other paid work.
Ask for: A carve-out and an attached list for inventions you already own, assignment limited to work related to the company or made with its resources, and written permission for any side project you intend to keep.
4. Restrictive covenants — non-compete and non-solicit
Offers often include a non-compete (you cannot join or start a competitor for some period) and a non-solicit (you cannot recruit colleagues or approach clients after you leave). How much these actually bind you varies sharply by state — some jurisdictions enforce reasonable ones, others limit them heavily or refuse to enforce them for most employees, and the rules keep changing. Do not assume a clause is either automatically enforceable or automatically void; the answer depends on where you are and the specific terms.
Watch for: A long or geographically broad non-compete, a non-solicit that covers people or clients you never worked with, and definitions of "competitor" so wide they cover most of your industry.
Ask for: The narrowest scope, shortest duration, and smallest geography you can negotiate, garden-leave or continued pay if they want to restrict you after you leave, and — because enforceability turns on your state — a check with an employment attorney before you rely on any assumption.
5. Termination, severance, and mandatory arbitration
Most US employment is at-will, meaning either side can end it at any time for almost any reason, so a warm offer letter rarely guarantees job security. Read how "cause" is defined — a broad definition lets the company fire you for cause and skip severance. Many offers also require arbitration: disputes go to a private arbitrator instead of court, often with a class-action waiver, which limits how and where you can bring a claim.
Watch for: At-will language with no severance commitment, a vague or one-sided "cause" definition, no notice period, and a mandatory-arbitration clause with a class-action waiver and the company choosing the forum.
Ask for: A defined severance amount and trigger in writing, a narrow and specific "cause" definition, a notice period, and — if arbitration is required — a mutual, neutral forum with the company covering the arbitration fees.
Before you sign that offer...
Upload the offer letter and any equity or bonus documents, tell Initialed you are the employee, and it flags the clauses that work against you — compensation, equity, IP, restrictive covenants, termination — with what to check, in about two minutes. Your first credit is free.
Review your offer freeFrequently asked
What should I check before accepting a job offer?
Look past the salary at the terms that bind you: how bonuses are paid and whether they can be clawed back, how equity vests and what happens if you leave, how far the IP-assignment and any non-compete reach, and what the termination, severance, and arbitration terms say. Ask for every plan document referenced in the offer — equity, bonus, commission — before you sign, because those often contain the real terms.
Are non-compete clauses in job offers enforceable?
It depends heavily on your state and the specific terms. Some jurisdictions enforce reasonable non-competes, others limit or bar them for most employees, and the law has been shifting. A clause being in your offer does not mean it is enforceable — and it does not mean it is void either. For anything that could affect your next job, ask an employment attorney licensed in your state.
Do I need a lawyer to review an offer letter?
For a routine offer, reading it carefully and negotiating the terms above often gets you most of the way. For a senior role, meaningful equity, a strong non-compete, or a complex severance and arbitration setup, a short review by an employment attorney is usually worth it. A fast, side-aware read can also surface the clauses worth a closer look before you spend on counsel.
Keep reading
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The five clauses that decide whether a freelancer gets paid — scope, payment, IP, termination, and liability.
Duration, geography, scope, and enforceability — how to read a non-compete before you sign (and why it varies so much by state).
Property, support, custody, and retirement — the terms in a divorce settlement that most often come back to bite.
The clauses that quietly decide what happens to a home, a business, or a career years from now — in plain English.
Definition scope, one-way vs mutual, perpetual terms, and the non-competes that get smuggled into a non-disclosure agreement.
This guide is general information, not legal advice, and Initialed AI is not a law firm. Employment law varies by jurisdiction and changes over time. For a high-stakes offer — senior roles, significant equity, or a strong non-compete — consult a qualified employment attorney licensed in your state.