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Employment Agreement Writer for Key Hires

A full employment agreement for a key hire, drafted for the state where they'll work, with gaps marked and review notes for your lawyer.

Helpful to include

Free to start · Opens in your River workspace, ready to edit and share

How to write an employment agreement

An employment agreement is a signed contract that sets the terms of one person's job. A good one states the role and pay, how either side can end it, and what the employee owes you during and after it. Most US hires need only an offer letter. A full agreement earns its place for executives and key hires, and whenever you promise severance, a guaranteed bonus or a fixed term, or want restrictions that outlast the job.

Write it for the state where the person will work, not where your company is incorporated. That state's law decides which clauses hold up, which is why one national template rarely fits.

A man in a light blue blazer signs a document at an office table as a woman and a man in gray suits look on
Every term is easier to change before the new hire signs. Photo: Vitaly Gariev on Unsplash

Start with the state where they'll work

Most US employment is at will: either side can end it at any time, for any lawful reason. Say so plainly, and don't undercut it elsewhere, for example by promising a job for a set number of years. Montana is the exception: after a probation period, firing someone there takes good cause.

The work state also sets final pay deadlines, whether unused vacation must be paid out, the notices due at hire and how far restrictions can reach. Remote hires bring their state's rules with them.

If you're not sure the person is an employee at all, run the contractor vs employee classification check first. If they'll also co-own your LLC, the LLC operating agreement should settle ownership and decision-making before this one.

What an employment agreement covers

The parts of an employment agreement

PartWhat it settlesGet it right
RoleTitle, duties, who they report to and where they workMatch the job description and the real work; duties help decide overtime status
TermAt-will employment, or a fixed term and what happens when it endsState it once and don't contradict it elsewhere
Pay and benefitsSalary, pay schedule, exempt status, and benefits under your plansCheck salary floors for exempt roles; name benefit plans, don't restate them
Bonus and equityTarget bonus, and options or shares under your planSay whether the bonus is discretionary; make grants subject to board approval
Ending the jobCause, good reason, notice, and what each kind of exit paysTie any severance to a release signed when they leave
Confidentiality and inventionsWhat stays secret and who owns the work they createAdd the federal trade secret immunity notice and any state limits
Restrictions and disputesNon-solicits or non-competes, governing law, and courts or arbitrationInclude only what the work state allows

Pin down pay, bonus and equity

A salary alone doesn't make someone exempt from overtime. Under federal rules, an exempt executive, administrative or professional employee must do exempt duties and be paid at least $684 a week1, about $35,568 a year. Some states set a higher floor, so check the work state's figure each year.

Spell out the bonus: whether it is discretionary or earned when targets are met, who decides, when it's paid, and whether they must still work for you then.

For equity, name the number of options or shares and the plan, and make the grant subject to board approval. Let the plan and grant agreement set vesting, so the documents never disagree.

Tie severance to a release

Severance is usually paid in exchange for a release of legal claims, signed when the person leaves rather than when they join. Define what triggers it, the amount, the payment schedule and the conditions, such as signing the release on time and returning company property.

For employees 40 and older, the EEOC explains that a release of age claims must give at least 21 days to consider it and 7 days to revoke it2. In a group layoff, the 21 days become at least 45. The release must also advise them in writing to consult a lawyer, and it can't waive claims that arise after signing. When someone leaves, the settlement agreement and release drafter can write that release.

Fix the payment dates too. Severance paid over time can count as deferred compensation under Section 409A of the tax code. If its timing rules are broken, the employee owes an extra 20% tax plus interest3.

ExampleA severance clause, worked throughAn illustrative example written for this guide

If the Company ends the Executive's employment without Cause, or the Executive resigns for Good Reason, the Company will pay six months' base salary. This applies only to an exit within two years of the Start Date.

Payments are made on regular paydays, starting with the first one after the release in Exhibit A takes effect. If the Executive doesn't sign it in the time it allows, or revokes it, no severance is owed.

  • A clear trigger. Two kinds of exit qualify, within a set window, using terms the agreement defines.
  • A fixed amount. Six months of base salary, paid on the normal payroll schedule.
  • Release first. Nothing is paid until the release takes effect, after its review and revocation periods.
  • Set timing. A defined start and a fixed schedule. Have a tax adviser check it against Section 409A.

Limit restrictions to what the state allows

There is no federal ban on non-competes. The FTC's 2024 rule is not in effect4: a court stopped it in August 2024, and in February 2026 the agency removed it from federal regulations.

Non-competes have been void in California for decades. Since 2024, the state's attorney general notes, the ban also covers contracts signed outside California5. Minnesota has voided new ones since July 2023, but its law leaves non-solicitation and confidentiality agreements alone.

Some states allow them only above a pay threshold. In Illinois, a non-compete is void unless the employee earns more than $75,000 a year, rising to $80,000 in 2027. You must also advise them in writing to consult a lawyer and give them at least 14 days to review it.

A void clause isn't harmless

In California, entering into a void non-compete is itself a civil violation, and employees can sue for damages and attorney fees if you try to enforce one.

Protect secrets and inventions

Confidentiality terms need the immunity notice from the Defend Trade Secrets Act. It tells employees that trade secret law won't punish them for sharing secrets in confidence with government officials or a lawyer to report suspected lawbreaking. Without it, you can't win exemplary damages or attorney fees6 from that employee in a trade secret suit.

Word the invention assignment as a present transfer ("hereby assigns"), not a promise to assign later. In some states, including Illinois and Washington, it can't cover an invention made entirely on the employee's own time without your equipment, supplies or trade secrets. That limit doesn't apply if the invention relates to your business or results from their work for you. Illinois and Washington also require written notice of the limit at signing.

Settle disputes, then check the draft

Name the work state's law and courts unless your lawyer advises otherwise. If you want arbitration, say so plainly, and leave sexual harassment and assault claims out of it. Since March 2022, federal law has let the person bringing such a claim take it to court instead7, whatever the agreement says.

Before it goes to the candidate

  • Names, amounts and dates match what you agreed
  • At-will status or the fixed term is stated once
  • Exempt status fits both the duties and the salary floor
  • The bonus says whether it's discretionary or earned
  • Severance depends on a release signed at exit, paid on fixed dates
  • Restrictions fit the work state's rules and notice steps
  • Confidentiality terms carry the trade secret immunity notice

When to bring in a lawyer

Have an employment lawyer in the work state review any agreement with severance, equity, restrictions or arbitration before the candidate sees it. This guide explains US law in general and isn't legal advice.

For an ordinary hire, a startup offer letter is usually enough. For a key hire, describe the terms in the box at the top of this page. River drafts the agreement for the work state, with review notes for your lawyer.

How it works

Start with the role and the terms you've agreed, in your own words, and the state where the person will work. River checks that state's current rules from official sources, then writes a complete agreement in your workspace in standard legal form, leaving out any clause the state voids. It never invents names, amounts or dates: missing terms are marked for you to confirm, and any standard default it uses is listed as an assumption.

Below the agreement come review notes, set apart for you to delete before sending. They list each term to confirm, River's assumptions, the state rules it applied with sources, anything it left out and why, and what a lawyer should check. It's a draft for that review, not legal advice.

  1. Describe the hire

    Give the role, pay, bonus, equity, any severance or restrictions, and the state where they'll work.

  2. River checks the state

    It researches that state's current rules on restrictions, overtime, final pay and inventions from official sources.

  3. Get the agreement

    A complete draft in standard legal form, with missing terms marked and separate review notes for your lawyer.

  4. Revise and share

    Ask for a version without severance, a shorter offer letter, or a plain summary for the candidate.

What you get

  • A complete employment agreement in standard legal form, with numbered sections and signature blocks
  • Your terms fitted to the work state's current rules, with the sources it relied on listed
  • Clauses the work state voids left out, with a note in the review section on why
  • Any severance tied to a release that gives workers 40 and older the time federal law requires
  • Confidentiality terms with the federal trade secret immunity notice, and invention terms within state limits
  • Every missing term marked for you to confirm, plus the points an employment lawyer should check

Common questions

What's the difference between an offer letter and an employment agreement?

An offer letter confirms the basics of a job, while an employment agreement is a full contract for terms both sides negotiate. The letter covers title, pay, start date and at-will status, usually alongside a confidentiality and invention assignment agreement. The agreement adds terms such as severance, good reason or a fixed term. The founder document studio fills in a startup offer letter.

Can I use a free employment agreement template?

Yes, as a starting point, but a national employment agreement template can't know the state where your hire will work, and that state decides which clauses hold. Before you use one, check its restrictions, final pay terms, invention assignment and governing law against that state's current rules, and delete anything the state voids.

Can an employment agreement include a non-compete?

Only where the work state allows it. No federal ban is in effect, so state law decides. California and Minnesota, among others, void them for employees, and Illinois and Washington allow them only above a pay threshold. Most other states enforce them only when they're reasonable in length, area and scope. Where a non-compete won't hold, a narrow non-solicitation clause sometimes will.

Does an employment contract end at-will employment?

Not unless it says so. An agreement can confirm that employment is at will and still promise severance if you end it without cause. A fixed term works differently, since ending it early without cause can breach the contract. Montana is the one state whose law requires good cause to fire someone after a probation period.

How do I write an employment agreement with River?

Type the hire's role, pay, bonus, equity, any severance or restrictions, and the state where they'll work into the box at the top of this page. River checks that state's current rules and writes the agreement into your free River workspace, with missing terms marked and review notes for your lawyer underneath.

Is the draft ready to sign?

No. Treat it as a careful first draft for an employment lawyer in the work state to review before the candidate sees it. River doesn't call the agreement compliant or enforceable. Its review notes give your lawyer a short list to start from: open terms, assumptions, the state rules applied and the points to check.

Is the employment agreement writer free?

Yes, it is free to start. Your employment agreement opens in a River workspace, where you can edit it, share it with your lawyer or ask River to change it. Paid plans add more AI use and access to the most advanced models.

Sources

  1. eCFR. “29 CFR 541.600 — Amount of salary required.” ecfr.gov (opens in a new tab)

  2. U.S. Equal Employment Opportunity Commission. “Q&A-Understanding Waivers of Discrimination Claims in Employee Severance Agreements.” eeoc.gov (opens in a new tab)

  3. Cornell Law School. “26 U.S. Code § 409A — Inclusion in gross income of deferred compensation under nonqualified deferred compensation plans.” law.cornell.edu (opens in a new tab)

  4. FTC. “Noncompete Rule.” ftc.gov (opens in a new tab)

  5. California Attorney General. “Attorney General Bonta Issues Consumer Alert Reminding California Workers of Their Rights.” oag.ca.gov (opens in a new tab)

  6. Cornell Law School. “18 U.S. Code § 1833 — Exceptions to prohibitions.” law.cornell.edu (opens in a new tab)

  7. Cornell Law School. “9 U.S. Code § 402 — No validity or enforceability.” law.cornell.edu (opens in a new tab)

Built by

Chandler Supple

Co-founder & CEO, River

Chandler has spent the last six years working in AI, building tools for millions of users and Fortune 100 companies. In 2025, he co-founded River to build a new kind of operating system for AI agents.

Reviewed by

Brian Joseff, Co-founder, River