A new survey finds that signing an employment contract and knowing what's in it are two different things
Nearly one in three American workers can't say what's in their own employment contract. A new survey from Goldberg Law Group, published in April, found that 31% of respondents were unaware of specific provisions in their employment agreement, including non-competes, non-solicitation clauses, arbitration requirements, and intellectual property assignment language, terms that can shape where they work next, how disputes get resolved, and who owns their ideas.
The problem isn't that people are skipping the document. Fifty-seven percent said they read their most recent employment contract in full before signing, making it the most thoroughly read agreement in the study. The issue is what they're missing inside it.
Reading isn't the problem, understanding is
Aubrey Mullins, a content strategist at Digital Third Coast, a Chicago-based agency that ran the survey on behalf of Goldberg Law Group, said the numbers point to a comprehension gap rather than a reading gap.
"The bigger issue appears to be comprehension," Mullins said. "Many respondents simply weren't familiar with the legal terminology like arbitration or non-compete provision, suggesting that there's really a challenge about understanding, not just reading."
The specifics back that up. Only 23% of respondents knew their contract included a non-compete clause. Just 13% were aware of mandatory arbitration or non-solicitation terms, and only 10% knew about an intellectual property assignment provision, language that can determine who owns work created on the job. That matters most for employees in creative or technical roles, where ownership of ideas and output is often baked into the fine print without much discussion at signing.
Mullins pointed out that this isn't necessarily employees being careless. "Reading doesn't make as much difference if you're not actually understanding what you're reading," she said. "So even for the people who are reading, they might not be missing these clauses, they're just not understanding them."
And those clauses carry real consequences. A non-compete can restrict where someone works after they leave a job. A non-solicitation clause can limit whether they can contact former clients or colleagues. An arbitration clause determines how disputes get resolved, often without the option of going to court. Disputes over these kinds of clauses do end up in court, as in a recent case in which a judge struck down a non-compete and non-solicit agreement for being far broader than the law allows.
Too embarrassed to ask
The survey also found that 48% of respondents would feel embarrassed to admit they signed something without fully reading it. Mullins thinks that shame is part of what keeps people from asking questions when they don't understand a clause, and that silence has a cost. Ninety-four percent of respondents said contracts should be required by law to include plain language summaries of key terms.
Digital delivery removes the natural opening to ask. Rather than a conversation, a new hire often receives a link and a signature field, particularly in remote or digital-first workplaces, making it harder to know who to even approach with questions.
"Especially in the digital age that we're in, so many agreements are online, so many things are just a click of a button and even just a digital signature," Mullins said. "It does kind of create that distance between feeling like maybe you could ask, hey, can you go over some of this with me?"
A simple fix, and a shared responsibility
Mullins said the fix doesn't have to be complicated. Plain language summaries, paired with an open invitation to ask questions, can go a long way. She also pointed to a more direct option: having a hiring manager or HR leader walk new hires through onboarding paperwork in person, rather than relying on paperwork to carry the conversation on its own.
"It would help the employee better understand what they're agreeing to, all the different clauses and provisions within that, what they're really signing," she said. "It can also help the employer or the company improve transparency throughout the onboarding process and create stronger trust and better relationships with the people that they're hiring."
She drew a distinction between employment agreements and other contract types in the survey, like service agreements, where companies sometimes benefit from a customer not reading closely. "I don't feel that's the case with employment agreements," Mullins said. "You want your employees to understand what they're agreeing to. You want them to be comfortable with that when they're working for you."
For HR teams, that reframes onboarding paperwork as a trust-building moment rather than a formality, a chance at building trust during a new hire's first days that can shape whether they stay past the first year. The federal government's own plain language guidelines offer one model for what clearer contract language could look like.
Whether HR leaders build in time for walking new hires through their paperwork or lean on plain language summaries, the survey suggests the current approach, a document, a signature line, and little else, is leaving a lot of employees in the dark about what they've agreed to.
