What Should I Check in a US Offer Letter Before Signing?

Key facts

The specifics, before the explanation.

• At-will employment applies in 49 states; only Montana requires cause after a probationary period
• Sign-on bonuses commonly carry a clawback if you leave within 12 months, sometimes 24; some are pro-rated
• Annual bonuses are usually discretionary unless the letter says "guaranteed," and many require you to be employed on the payout date
• Equity typically vests over four years with a one-year cliff, though some companies have shortened schedules
• The FTC non-compete ban was blocked in court; non-competes remain enforceable in many states but are banned in California, Minnesota, North Dakota and Oklahoma
• Offers are often contingent on a background check, drug screen or proof of work authorization (Form I-9)

What this actually means

Most US offer letters are two to three pages and look simple, which is why people skim them. Read every line. The letter sets the terms you will be held to, and what it leaves out is often more important than what it includes.

Start with money. Confirm the base salary matches what was discussed, and check whether it is annual or hourly. Look for the bonus: is there a target percentage, is it guaranteed for year one, and what are the conditions? Sign-on bonuses almost always have a repayment clause; check the length and whether it is pro-rated. If equity is included, look for the number of units or the dollar value, the vesting schedule, and whether it is options or restricted stock, since the tax treatment differs.

Next, the conditions. The start date, the work location, the office attendance expectation, the reporting line, and the job title should all be stated. If you negotiated anything verbally, such as remote days, a delayed start or a six-month review, it needs to be in the letter or it does not exist. The letter will also say the offer is contingent on a background check and work authorization; make sure you can clear both.

Finally, the documents the letter references. Many letters say you will be required to sign a confidentiality agreement, an arbitration agreement or a non-compete. Ask to see these before you sign the offer, not on day one. A non-compete can restrict your next move for a year or more, and arbitration clauses waive your right to sue. Neither is a reason to refuse, but both are reasons to read before you commit.

What to actually do

Rules and figures move. Confirm anything time-sensitive with the official regulator before you rely on it.

• Compare every number in the letter to your notes from the verbal offer before you sign
• Ask for any referenced agreements (non-compete, arbitration, IP assignment) before signing the offer letter
• Get verbal promises such as remote days or a scheduled review written in or treat them as not agreed
• Check the sign-on clawback period and ask for it to be pro-rated and to exclude layoffs
• Ask for 48 hours to review; a reasonable employer will give it

Frequently asked questions

Can an employer withdraw an offer after I sign?

Yes, under at-will employment an offer can be rescinded, though some states allow a claim if you relied on it and suffered loss. Do not resign your current job until background checks are cleared and the start date is confirmed.

Is the offer letter a binding contract?

Usually not in the sense of guaranteeing employment, but the pay and bonus terms it states are generally enforceable for work performed. Treat it as the record of what was agreed.

Should I sign a non-compete?

Read the scope, duration and geography first. Narrow non-competes tied to real confidential information are common; broad ones that would block you from the whole industry are worth negotiating or declining.

Sources

Referenced for this guide:

• U.S. Department of Labor
• FTC: non-compete rule