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 can determine whether an employee is limited to minimum entitlements under Ontario's Employment Standards Act or may claim more at common law. Read the without-cause language together with any cap, benefit-continuation terms, mitigation language, and conditions attached to payments above the statutory minimums.

Cause under the Employment Standards Act is not the same test as common-law just cause. Broad definitions and performance-based wording deserve a careful read rather than being treated as boilerplate.

Ontario generally prohibits employers from entering into non-compete agreements with employees, subject to limited statutory exceptions such as certain executive roles and some sale-of-business arrangements. Non-solicitation, confidentiality, and non-disparagement clauses are different and still need their own review.

Do not treat every post-employment restriction as equivalent. Identify the conduct it restricts, the duration and geography, and whether the wording fits the role and governing law.

Bonus and commission disputes often start with timing: when was the amount earned, and what do the agreement and plan say happens on termination? Check whether the formula is discretionary or contractual, how it works, and whether any limiting language clearly addresses the notice period. Commission plans should also define when a deal closes and when a chargeback applies.

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.