Before You Sign an Employment Agreement

Base salary is easy to compare. Short-term incentives, long-term incentives, sign-on and retention bonuses, and equity plans require closer reading. Check how bonuses are calculated, what triggers payment, and what happens on termination without cause, resignation, or a change of control.

Look for vesting mechanics on any equity or deferred compensation: the schedule, the definition of a good leaver, acceleration on termination without cause, and what happens if the plan is amended.

The termination clause is the single most important paragraph in the document. Ontario law provides statutory minimums, but employers commonly contract above those minimums in a structured way. Read the without-cause clause carefully, including any caps, set-offs, mitigation obligations, and release requirements tied to payment.

For-cause language is narrower than most people expect. Clauses that attempt to define cause broadly have been scrutinised by Ontario courts. If there is a performance-based definition, understand what it requires.

Non-competition, non-solicitation, and non-disparagement clauses vary widely in enforceability. Look at scope, geography, and duration. A non-compete that reaches across the country for twelve months may not be enforceable, but it can still chill the next role.

Post-employment restrictions should be consistent with the role, and they should be negotiated — not accepted as standard boilerplate.

The most common fight in an employment file is about what was earned and when. Document whether bonuses are discretionary or contractual, how the calculation works, and what is owed on termination. Commission plans should have a clear deal closure and chargeback policy, especially where sales cycles are long.

Confidentiality obligations are ordinary. IP assignment language deserves a closer look, particularly if you have pre-existing projects, moonlighting plans, or an active consulting arrangement. Carve-outs for personal IP are sometimes negotiable.