7 Terms That Will Likely Show Up in Your Job Offer, Defined

You’ve made it through the countless resume edits, cover letter rewrites, and multiple interviews. Now you have the ultimate reward for your efforts: a job offer. First off, congrats! But of course, it’s not over yet. Along with a verbal offer, you also will receive an official offer letter, and like any sort of contract you’ll want to read it over carefully… and then read it over a few more times. Signing this document means you’re agreeing to important terms of your employment (think salary, benefits, etc.) and you’ll want to know exactly what they’re proposing. The problem is, these letters can be filled with a lot of job offer jargon that might throw you off, so here’s a definitive rundown of common terms you could encounter.

1. Non-Compete Clause (NCC)

Sometimes also referred to as a covenant not to compete this tells you that after you leave this job you are not allowed to work at a competing company. They should specify the region and how long of a time period this applies to. Non-compete clauses are usually put in place to avoid employees leaving their job and taking confidential information straight over to a competitor.

2. Non-Solicit Agreement

This means you are not allowed to leave this job and try to take clients, customers, and sometimes even other employees with you, for yourself or a competitor. This can be part of a non-compete clause because it’s also part of ensuring you’re not taking private company information to a competitor after you leave. Enforcing this can depend on what state you’re in, however. For example, in California it’s void!

3. Mandatory Arbitration

If you see this term in your offer it means that you can’t bring legal issues you have with the company to court, and that it must be solved through arbitration. Arbitration refers to settling the dispute just between you, the employer, and an impartial party making the decision. This is popular with employers mostly because it costs much less for them. But also note that this cannot stop you from filing a claim to agencies like the U.S. Equal Employment Opportunity Commission.

4. Deferred Compensation

This term refers to the ways part of your paycheck can be put aside until later. Basically, this means retirement plans, pension plans, and employee stock options. Usually these are done for tax benefits, and it’s really a personal decision for any employee. You might also want to consider speaking with a financial advisor when making these decisions if finances aren’t your strong suit.

5. Discretionary Bonus

Quite literally meaning “a bonus that is up to your employer’s discretion,” this refers to a monetary bonus based on your performance. It means you had no specific criteria to receive a bonus, they just decided after you did something well that they wanted to reward you. In your offer letter it can be referred to as a possible percentage of your salary.

6. Non-Disclosure Agreement (NDA)

You might also see this called a confidentiality agreement or proprietary information agreement. They all basically refer to the same idea: you’re agreeing to keep private information private. These usually refer to trade secrets and other information your company owns that they don’t want anyone outside of the company knowing, especially if it’s valuable (think Coca-Cola recipe).

7. At-Will Employment

This term means you and the employer both know that you can be fired, or quit, at anytime without prior warning. It also means the employer doesn’t need to show a “just cause” for letting you go. Unless your job offer and contract state otherwise, being employed at-will is the legal default, but you should try to figure out if you’re being hired at-will before accepting the offer so you can know for sure. Also look out for other language that refers to at-will employment like that you can be fired “for any reason” or “at any time.”

There you have it! Seven common terms that will likely show up in your job offer. Like any contract, it’s important to read your offer letter thoroughly and bring up any concerns to your future employer before signing your letter. If everything checks out, sign on the dotted line and get excited about your new job!

Note: The above information is intended to educate readers on common terms in job offers. In no way should the above be taken as legal advice or counsel.