9 Employment Contract Red Flags You Should Never Ignore

Why You Should Actually Read Your Employment Contract

You got the offer. The salary looks good. You're excited to start. But before you sign, your employment contract deserves more than a quick scroll. Buried in the legal language are clauses that can affect your side projects, your next job, your overtime pay, and even who owns the ideas you come up with after hours.

1. Non-Compete Clauses

A non-compete restricts you from working for a competitor after leaving the company. Some are reasonable (6 months, limited geography). Others are absurd (2 years, global, any "related" industry). In many EU countries, the employer must compensate you during the non-compete period. If they don't, the clause may be unenforceable.

2. Intellectual Property Assignment

Many contracts include a clause that assigns ALL intellectual property you create to the employer — including work done outside of office hours on personal projects. If you're a developer, designer, or creative professional, this is critical. Look for language that limits IP assignment to work done "within the scope of employment."

3. Vague Job Description

A job description that says "and other duties as assigned" gives the employer near-unlimited flexibility to change your role. If you were hired as a marketing manager but end up doing customer support, a vague description makes it hard to push back.

4. Unpaid Overtime Expectations

Some contracts include "overtime is compensated through the existing salary" — meaning you won't get paid extra regardless of how many hours you work. In Germany, this clause is often limited by courts to about 10-15% of total working hours. Know the limits in your jurisdiction.

5. Probation Period Terms

A probation period with shortened notice (often 2 weeks) is standard. But some contracts extend probation to 12 months or include harsher terms during this period. Check both the length and the notice period during probation.

6. Garden Leave Clause

A garden leave clause allows the employer to send you home during your notice period while still paying you. Sounds nice, but it can prevent you from starting your new job immediately. Combined with a long notice period, this can delay your career move by months.

7. Clawback Provisions

Some contracts require you to repay training costs, relocation bonuses, or signing bonuses if you leave within a certain period (often 1-2 years). These amounts can be substantial — sometimes tens of thousands of euros.

8. Restrictive Side Project Clauses

If you have a side business or freelance work, check whether the contract restricts outside activities. Some employers require written approval for any side work, even unrelated to your job.

9. Arbitration Clause

An arbitration clause waives your right to sue in court. Instead, disputes go through private arbitration — which can be faster but often favors the employer. This is more common in US contracts but increasingly appears in international employment agreements.

Know What You're Signing

Upload your employment contract to explains.app and get every clause explained in plain language. Our AI flags risk clauses like non-competes, IP assignments, and overtime terms — so you can negotiate from a position of knowledge, not hope.

Frequently Asked Questions

Can I negotiate my employment contract?

Absolutely. Most employers expect some negotiation on key terms. The key is knowing which clauses are standard and which are unfavorable — that's where explains.app helps.

Are non-compete clauses always enforceable?

No. Many jurisdictions limit their scope, duration, and geographic reach. In some EU countries, the employer must pay compensation during the non-compete period for it to be valid.