AI for employment lawyers: employment, separation and non-compete review in Word

Employment lawyers review the same documents again and again: offer letters, executive employment agreements, separation and release agreements, contractor agreements and restrictive covenants. The law behind them changes quickly, especially for non-competes. An AI assistant in Word can do the first pass and the markup, while you keep track of the rules that decide enforceability.

Where AI helps in an employment practice

• First-pass review of employer paper for a departing executive, or of an executive's proposed changes for an employer client.
• State-aware drafting. Select the state once and LexDraft adjusts non-compete scope, notice periods, governing law and venue, and flags clauses that are unenforceable in that state.
• Conversational edits. Ask "make the non-compete 6 months instead of 12" and the draft updates.
• Clean documents. Rule-based checks catch undefined terms ("Good Reason", "Cause") and broken section references.

Employment agreement: what to check

• Pay, bonus and equity terms, and what happens to each on termination.
• Definitions of Cause and Good Reason, with notice and cure periods.
• Severance conditions, including a release requirement and its deadline.
• IP assignment and invention carve-outs (see below).
• Restrictive covenants: non-compete, non-solicit, confidentiality.
• Dispute resolution, arbitration, governing law and venue.

Non-competes: the rules that matter now

• Federal. The FTC's 2024 non-compete rule never took effect. A federal court in Texas set it aside in August 2024 (Ryan LLC v. FTC), and the FTC withdrew its appeals in 2025. State law still governs.
• Bans. California voids most employee non-competes (Business and Professions Code 16600 and 16600.5). Minnesota bans new employee non-competes from 1 July 2023 (Minn. Stat. 181.988). North Dakota and Oklahoma also restrict them by statute.
• Income thresholds and notice rules. Several states, including Washington, Colorado, Illinois, Oregon and Maryland, bar non-competes below set earnings levels and add notice requirements. Thresholds change, often every year.

Our state guides for solo lawyers list the non-compete statute for each state we cover.

Separation and release agreements: what to check

• Age discrimination waivers. Under the Older Workers Benefit Protection Act (29 U.S.C. 626(f)), a release of ADEA claims by a worker aged 40 or over needs, among other things, 21 days to consider (45 days in a group program) and 7 days to revoke after signing.
• Harassment-related terms. The Speak Out Act (2022) limits pre-dispute non-disclosure and non-disparagement clauses for sexual assault and sexual harassment disputes. The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (2022) lets the claimant choose court over a pre-dispute arbitration clause for those claims.
• Confidentiality and non-disparagement for non-supervisory staff. Check current NLRB law; the Board's 2023 McLaren Macomb decision restricted broad clauses in severance agreements.
• State-specific release rules, such as California Civil Code 1542 waivers.

IP assignment carve-outs

Several states limit how far an employer can claim inventions made on the employee's own time without company resources. California Labor Code 2870 is the best known, and Washington, Illinois, Minnesota, Delaware and North Carolina have similar statutes, some of which require written notice of the limit in the agreement itself.

A workflow in Word with LexDraft

1. Open the agreement in Word and open LexDraft in the side panel.
2. Select the employee's work state and run the review. Findings come back graded Critical, High, Medium or Low.
3. Run the defined-term and cross-reference checks.
4. Accept the redlines you agree with as native tracked changes, and add your own.
5. Read the final document yourself, then send it.

For a full checklist, see how to review an employment agreement in Word.

What LexDraft does not do

LexDraft does not track every threshold change or agency decision in real time, and it does not give legal advice. Confirm current thresholds and case law before you rely on any output.

Using AI ethically in this practice

ABA Formal Opinion 512 (July 2024) and many state bars say the same four things: understand the tool, protect client confidences, check every output, and bill fairly for AI-assisted work. Our state-by-state guide to AI ethics for solo lawyers summarises the guidance in 20 states and D.C.

Plans

Start on the Free plan: 5,000 generated words a month, no time limit and no credit card. Professional is $99 a month or $990 a year for 100,000 words a month. Business is $199 a month or $1,990 a year with unlimited words. LexDraft runs in Word 365 (Windows and Mac), Word 2021 and Word on the web, and it does not use customer documents to train models.

This guide is general information, not legal advice. LexDraft does not give legal advice; qualified counsel must review every draft. Spotted something out of date? Email support@lexdraft.ai and we will fix it.