Show Employment Contract Report
show_employment_contract_reportFull Description
This tool is specifically for EMPLOYMENT AGREEMENTS (full-time, part-time, executive contracts). Use this for analyzing contracts between employers and employees.
For independent contractor agreements, use the freelance contract tool instead. For other contracts, use the generic contract tool.
Do not use this tool for criminal law matters, immigration matters, or family law disputes.
This tool produces a carousel of report cards for employment agreement health check. For each aspect, provide a status and note. Also include a short overall conclusion.
Aspects included:
🚫 Non-Compete Clause
What to look at
Duration of restriction (6 months vs. 1-2+ years) Geographic scope (city, state, nationwide, global) Industry/role scope (direct competitors, similar industries, any business) State enforceability (CA/MN/ND banned; WA/MA/IL/CO limited; others vary) Consideration for signing (new hire vs. existing employee, additional compensation) Compensation during restriction period (garden leave, 50% salary) Blue pencil clause and reformation provisions
Signals
Green
No non-compete clause, OR very narrow scope (≤6 months, specific city/region only, direct competitors only) in state that limits enforcement (CA/MN/ND ban them; WA/MA/IL/CO restrict), OR includes garden leave payment (50%+ salary during restriction), signed at hire with clear consideration, employer-initiated waiver provisions
Warning
Moderate duration (6-12 months), state/regional geographic scope, similar industries but not overly broad, state with case-by-case enforcement, unclear consideration (existing employee without raise), partial compensation during restriction or unclear enforceability, vague competitor definition, reasonable blue pencil clause
Red
Long duration (1+ years or unlimited), nationwide/global scope, vague/broad industry restriction ('any business'), state that enforces broadly (TX/FL), existing employee forced to sign without consideration, no compensation during restriction, penalty/liquidated damages clauses, violates state income thresholds (WA $116k+, IL $75k+), low-wage worker non-compete (likely illegal per FTC guidance), attempts to waive state law protections
💡 IP & Invention Assignment
What to look at
Scope of assignment (job-related only vs. all inventions anytime) Prior inventions disclosure form and carve-out list Time scope (work hours only vs. personal time) Equipment scope (company resources vs. personal equipment) State law compliance (CA Labor Code §2870, IL/NJ/WA/UT/KS similar) Post-employment assignment obligations (1 year tail common) Side projects and moonlighting permissions Moral rights waiver scope
Signals
Green
Assignment limited to inventions directly related to company's actual/anticipated business, created during work hours using company resources; includes prior inventions disclosure form with clear exclusion process; explicitly complies with state law (CA §2870 notice included; similar for IL/NJ/WA); no or short (≤1 year) post-employment assignment tail; side projects allowed if unrelated; present-tense assignment ('hereby assign'); reasonable post-employment cooperation with compensation; moral rights waiver limited to work product
Warning
Broader assignment (work-related plus potentially related ideas), timing ambiguous (work hours vs. personal time not clearly separated), prior inventions process exists but vague, state law compliance unclear or generic, 1-year post-employment assignment for related work, limited side project permissions require disclosure, future-tense assignment ('will assign'), unpaid post-employment cooperation expected, moral rights waiver somewhat broad
Red
Assignment of ALL inventions regardless of relation to business or timing, includes personal time and personal equipment explicitly, no prior inventions carve-out or disclosure form, violates state law (no CA §2870 notice or attempts to override it), indefinite or long (2+ years) post-employment assignment, no side projects allowed or all must be disclosed, demands waiver of state law protections, includes broad moral rights waiver beyond work product, onerous post-employment obligations without compensation
🚪 Termination Terms
What to look at
Employment status (at-will vs. for-cause vs. fixed-term) Severance provisions (amount formula, triggers, conditions) Notice period requirements (mutual vs. one-sided) Resignation process and restrictions Garden leave provisions (paid vs. unpaid, duration) Release/waiver requirements for severance Non-renewal terms for fixed-term contracts Liquidated damages for early departure
Signals
Green
At-will employment with reasonable severance (2+ weeks per year of service or defined formula), mutual notice period (2-4 weeks both sides), severance not contingent on broad release (only standard legal minimums like ADEA 21-day review), garden leave if any is paid at full/partial salary, clear resignation process without penalties, no liquidated damages, non-renewal for fixed-term gives advance notice (60-90 days)
Warning
At-will with minimal/discretionary severance (1 week per year or 'may provide'), one-sided notice (employee 2-4 weeks, employer 0-2 weeks), severance requires moderately broad release but preserves statutory claims (EEOC, etc.), garden leave partly paid or short unpaid period, resignation requires extended notice (2-3 months), fixed-term with automatic renewal unless notice given, modest liquidated damages for early breach
Red
For-cause only termination (very restrictive for employee to leave), no severance or contingent on impossible conditions, heavily asymmetric notice (employee 3+ months, employer none or at-will), severance requires waiver of all claims including statutory rights (illegal in many states), garden leave unpaid or imposes non-compete without pay, resignation treated as breach with damages/clawback, significant liquidated damages for departure, fixed-term with auto-renewal trap, attempts to ban future employment
💰 Compensation & Equity
What to look at
Base salary amount, currency, and payment schedule clarity Bonus structure (discretionary vs. objective metrics, calculation method, timing) Equity compensation (type: options/RSUs, amount, vesting schedule, cliff, acceleration) Clawback provisions (triggers: fraud, misconduct, restatement; scope: which compensation) Commission terms if applicable (rates, calculation, payment timing, caps) Benefits eligibility (start date, vesting periods, COBRA rights) Pay transparency compliance (state law disclosure requirements) Deferred compensation and 409A compliance
Signals
Green
Clear base salary stated with regular payment schedule (bi-weekly/monthly); bonus with objective performance metrics and defined calculation method, paid on schedule; equity with standard 4-year vesting/1-year cliff, single-trigger acceleration on change of control, clear grant documentation; clawbacks limited to fraud/financial restatement (SEC compliance); commission structure transparent with timely payment (30-60 days); benefits start immediately or within 30-90 days with standard vesting; complies with pay transparency laws (CA/NY/WA/CO); equity strikes at FMV (409A compliant)
Warning
Base salary clear but payment schedule not specified or non-standard; bonus entirely discretionary with vague 'based on performance' but no metrics/formula; equity vesting longer than 4 years (5-6 years) or no cliff, double-trigger acceleration; clawbacks for broad 'cause' or poor performance (beyond fraud); commission structure complex with delays (90+ days) or calculation disputes likely; benefits require 6-month+ vesting or eligibility, some benefits discretionary; no mention of pay transparency where required; equity valuation practices unclear
Red
Base salary with clawback provisions or contingent on conditions; bonus completely discretionary with 'may or may not be provided' language and zero criteria; equity with excessive vesting (7+ years), no acceleration provisions even on acquisition/termination, vesting can be revoked; clawbacks for any termination or even competing after leaving (likely unenforceable); commission with indefinite delays, caps that limit earnings, or employer can change terms unilaterally; benefits contingent on long tenure (2+ years) or largely discretionary; violates pay transparency requirements; deferred comp structured to trigger 409A penalties; salary below state minimum for overtime exemption
🤐 Confidentiality & Trade Secrets
What to look at
Scope of confidential information (specific vs. overly broad) Duration of confidentiality obligations (post-employment period) Exclusions (public knowledge, independently developed, prior knowledge) Return of materials obligations Trade secrets vs. general knowledge distinction Third-party confidentiality obligations DTSA whistleblower immunity notice (federal requirement)
Signals
Green
Confidentiality limited to specific categories (trade secrets, proprietary business info, customer data), clear exclusions for public information and general skills/knowledge, reasonable post-employment duration (2-3 years) or perpetual only for true trade secrets, includes DTSA immunity notice for whistleblowers, allows disclosure required by law, distinguishes confidential info from general industry knowledge
Warning
Broader definition of confidential information but includes some exclusions, post-employment obligations somewhat long (5 years) but not perpetual for non-trade-secrets, vague distinction between trade secrets and general knowledge, limited discussion of your rights to use general skills, DTSA notice missing or incomplete, return of materials broadly defined
Red
Extremely broad definition ('any information learned during employment'), no exclusions for public knowledge or general skills, perpetual confidentiality for all information (not just trade secrets), no DTSA whistleblower notice (required by federal law), attempts to restrict use of general knowledge/skills, prohibits disclosure even when required by law, overly burdensome return obligations (e.g., 'all notes even personal')
🤝 Non-Solicitation Clauses
What to look at
Customer/client solicitation restrictions (scope and duration) Employee recruitment/hiring restrictions Definition of 'solicit' (active outreach vs. responding to inquiries) Geographic scope if any Duration (typically 1-2 years) Reasonableness under state law (some states treat like non-competes) Social media and passive contact treatment
Signals
Green
Limited to customers/clients you directly worked with or had material contact with, reasonable duration (12 months or less), 'solicitation' defined as active outreach (doesn't prohibit responding to inquiries), employee non-solicit limited to direct reports or close colleagues, no geographic restriction or reasonable one, doesn't prohibit passive social media contact (LinkedIn connections, etc.), complies with state law (e.g., IL requires $45k+ salary for non-solicits)
Warning
Applies to all company customers/clients regardless of your contact, moderate duration (12-18 months), 'solicitation' somewhat vague (unclear if responding to calls counts), employee non-solicit covers any company employee, some geographic scope, restricts business-related social media contact, unclear state law compliance, may be challengeable but not clearly void
Red
Extremely broad (all customers, all employees, all vendors, anyone company ever did business with), long duration (2+ years), 'solicitation' defined so broadly it includes any contact or responding to inquiries, prohibits all social media interaction including passive connections, includes geographic restrictions on non-solicit (unusual), violates state law (e.g., IL below $45k salary threshold, or CA where overly broad non-solicits may be void), combines with non-compete to make leaving nearly impossible
⚖️ Dispute Resolution & Arbitration
What to look at
Mandatory arbitration clause (requires disputes go to arbitration not court) Class action waiver (prohibits joining class/collective actions) Arbitration rules and forum (AAA, JAMS, cost-sharing) Scope of disputes covered (employment, statutory claims, etc.) Preservation of EEOC/NLRB rights Attorney fees provisions (mutual vs. one-sided) Forum selection/choice of law clauses Opt-out provisions if any
Signals
Green
No mandatory arbitration (disputes can go to court), OR arbitration with: mutual obligation, neutral forum (AAA/JAMS), employer pays arbitration fees, preserves right to file EEOC/NLRB charges, no class action waiver (or narrow waiver post-Epic Systems), mutual attorney fee provision (prevailing party), reasonable forum location, opt-out window provided (21-30 days), preserves whistleblower rights, statutory claims explicitly arbitrable but with full remedies
Warning
Mandatory arbitration with generally fair terms but: employer-friendly arbitrator selection process, split arbitration costs, class waiver included (now legal per Epic Systems but still employee-unfavorable), one-sided attorney fees (employer only), choice of law is employer's state (inconvenient for you), preserves EEOC rights but vague on scope, short opt-out window (7 days) or notice buried in handbook, some statutory claims excluded
Red
Mandatory arbitration with extremely unfavorable terms: employer selects arbitrator or forum, employee pays significant arbitration costs, broad class waiver including FLSA collective actions, severely limits discovery or remedies, one-sided attorney fees favoring employer, attempts to waive EEOC or statutory rights (likely unenforceable but intimidating), no opt-out provision, short statute of limitations (shorter than law allows), confidentiality clause prevents discussing outcome, prohibits whistleblower complaints, forum in distant location
👔 Work Classification & Status
What to look at
Employee vs. independent contractor classification (IRS/DOL tests) Exempt vs. non-exempt status for overtime (FLSA salary and duties tests) Salary level relative to state exemption thresholds Job duties description alignment with exemption (executive, administrative, professional) Benefits implications of classification Misclassification risks and indicators Part-time vs. full-time status and benefits Hours expectations and overtime eligibility
Signals
Green
Clear employee status (W-2, not 1099) with benefits, OR if contractor: truly independent with control over work and multiple clients; if exempt: salary meets federal ($55k+) and state thresholds (CA 2× minimum wage, NY $65k+, etc.) AND duties clearly fit exemption category (executive/admin/professional); if non-exempt: hourly rate stated with overtime at 1.5× for 40+ hours, clear timekeeping; full-time with benefits eligibility; no misclassification indicators
Warning
Classification arguably correct but close to line: employee status but some contractor-like control, OR salary near exemption threshold ($50-60k) in states with rising minimums, duties somewhat ambiguous for exemption (mix of exempt and non-exempt work), benefits limited or vesting required, part-time status with unclear benefits, if contractor: some control by company but still independent, classification could be challenged but likely defensible
Red
Clear misclassification indicators: labeled contractor but controlled like employee (set hours, can't work for others, provided equipment, integrated into company), OR labeled exempt but salary below threshold ($50k in high-threshold states, <$55k federal pending rule), OR exempt label but duties are clearly non-exempt (no management, no discretion), employee bears misclassification risk (e.g., no taxes withheld but can't work independently), no overtime for clearly non-exempt work, missing benefits that should apply, contract attempts to waive misclassification claims
🤝 Parties & Basics
What to look at
Employer legal entity name, address, and correct employee name Effective date, start date, and role title listed consistently Signature blocks and authority to sign (HR, officer, or delegated manager)
Signals
Green
All parties and dates are clear and consistent; signatures are properly authorized; attachments and referenced documents are included
Warning
Minor inconsistencies or missing identifiers (addresses, entity suffixes); referenced documents not attached
Red
Employer entity unclear or incorrect; missing or conflicting dates; unsigned or unauthorized signature blocks
📋 Role Scope & Duties
What to look at
Job title, primary responsibilities, and reporting line Work location expectations (remote, hybrid, onsite) and travel requirements Performance expectations or role changes clause
Signals
Green
Role and responsibilities are clearly defined with reasonable flexibility and clear reporting structure
Warning
Duties described broadly with some ambiguity; location or travel expectations unclear
Red
Employer can unilaterally change role, location, or responsibilities without limits; duties defined as 'any tasks assigned'
🕊️ Compliance & Policies
What to look at
Compliance with laws and workplace policies (harassment, safety, security) Reference to handbooks or codes of conduct and how they change Export controls, background checks, or eligibility to work requirements
Signals
Green
Standard compliance obligations with clear, accessible policies and reasonable change process
Warning
Broad policy references that can change with notice; unclear which documents apply
Red
Employer can change policies at any time without notice; employee guarantees broad compliance with unlimited liability
📑 Boilerplate
What to look at
Entire agreement clause and hierarchy of documents Notice requirements and delivery methods Amendment requirements and severability clause
Signals
Green
Clear hierarchy; amendments only in writing; reasonable notice procedures
Warning
Confusing hierarchy between offer letter and handbook; notice methods unclear
Red
Employer can change terms unilaterally; deemed acceptance by continued work
You can leave aspects that are not applicable to this employment agreement as null. But in general, try to provide a status for each applicable aspect.
After all aspects, provide a concise conclusion with general considerations and questions the user may want to discuss with a qualified attorney. Do not provide legal advice and do not tell the user a contract is "safe to sign".
Important: sometimes, the document you are analyzing is in different language than user's language. ALWAYS use user's language for the report!
Important: If you are calling the widget, but get error like this: "This tool call was blocked by OpenAI because we couldn't determine the safety status of the request." It means that you have included too sensitive information into the tool call. Try again, but do not include any sensitive information (names, phone number, address, email, company names, etc.)
Call Example
For example, you are analyzing a Senior Software Engineer Employment Agreement. The contract is written in German, but the user speaks Spanish.
{
"user_preferred_language": "Spanish",
"contract_title": "Contrato de Empleo para Ingeniero de Software Senior",
"compensation": {"status": "Green", "note": "Salario competitivo con estructura de bonos clara y calendario de adquisición de acciones."},
"non_compete": {"status": "Warning", "note": "No competencia de 12 meses es largo. Negociar a 6 meses o alcance más limitado."},
"ip_assignment": {"status": "Red", "note": "Asigna todas las invenciones incluyendo proyectos personales. Negociar excepción para trabajo no relacionado."},
"conclusion": "Oferta sólida con una preocupación importante. Negociar la cláusula de asignación de PI antes de firmar."
}Parameters (15 required)
boilerplatecompensationcomplianceconclusionstringconfidentialitycontract_titlestringdispute_resolutionip_assignmentnon_competenon_solicitationpartiesscopetermination_termsuser_preferred_languagestringwork_classification