Article by Malecki Brooks Law Group, LLC
Employment contracts are not entered into because the parties assume a relationship will be without problems. Contracts should be entered into assuming a relationship will have problems and address those problems before signing. This is particularly important for physicians who are recruited to a new job and who have an established career or are on a career trajectory. Often, established physicians make significant moves to accept a new position including moving their home and families. This requires careful thinking and the ability to predict possible situations that should be addressed during contract negotiations.
Physicians are hired because the employer, be it a hospital/health system, physician group, or educational institution, sees the benefit of having that physician as a member of its team. It may be because of a needed specialty, anticipated revenues, name recognition and/or a multitude of other reasons. At the time an offer is extended, the excitement of the new opportunity and the proposed compensation being offered are not the only considerations. Physicians should keep their eyes wide open to avoid pitfalls which may present themselves should the relationship go south.
When receiving an employment contract from a prospective employer, physicians should review the written document carefully and consider negotiating, among other things, the following:
- A termination provision that only allows for termination at the end of the contract term unless the termination is “for cause”. For cause should not be left in such a way that it is vague or only up to the employer to define what it means.
- A severance package if the contract is terminated by the employer.
- The preservation of any bonus that would be paid had employment continued.
- A clear indication of how and when post-termination productivity pay will be compensated.
- The payment of tail insurance if professional liability coverage is on a “claims made” basis.
- The retention of medical staff membership.
- A non-disparagement agreement that survives termi-nation of the contract.
- A true option to become a partner if that is negotiated.
- The forgiveness of any signing or other incentives if terminated by employer at any time without cause or if terminated by physician at any time with cause.
- Release of non-compete provisions if terminated by employer at any time without cause and if terminated at any time by physician for cause.
Above all, make sure that before accepting the terms of any employment offer, you have your contract reviewed by an experienced health care attorney.
Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.