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Why doctors should seek employment contract review

One young primary care physician had received an offer and was in the process of moving. That all changed when she learned a provision in the contract would limit how she could spend her free time.

A wave of mergers has increased the percentage of Catholic-owned or affiliated of hospitals. NPR reported last fall on how these networks require this contract clause “provide services in a manner consistent with the Ethical and Religious Directives for Catholic Health Care Services.” This can prohibit a physician from promoting or condoning contraceptive practices. While only one example of a contract clause that can pose a problem, it illustrates why it is important to seek a legal review of any physician employment contract.

Complexities of a physician employment agreement

Written contracts define the employer-employee relationship along with rights and obligations. To rely on an agreement to reflect your interests and protect your future rights, you need it to include precise language. Ambiguous or boilerplate clauses may offer little help if a dispute arises.

Here are issues to consider:

  • Compensation structures often include a base along with incentive plans. Is an offer comparable to what others receive in the region?
  • Benefits packages often include malpractice insurance. Does a policy include “tail coverage” after your employment ends?
  • Scheduling often requires flexibility, but get some specifics in writing (for instance, one Saturday on call each month). On a part-time contract, how many hours will you work each week?

Non-solicitation clauses/Non-compete agreements

Restrictive covenants protect employers from competition. The scope in terms of timing and the geographic radius are very important. It is typical for an employer to ask that you refrain from working for a competitor or soliciting clients for one or two years.

The more contentious issue is often the radius. In a suburban area, it might be a 15-mile radius or in a city several miles. It’s crucial to negotiate this term or it could limit your future employment options.

2011 appellate opinion illustrates what can go wrong. The contract at issue stated, “the non-compete agreement would become effective only if [the physician] separated from employment.” After the vascular surgeon’s contract ended, he started employment at another health system in the same county. In dismissing allegations he violated a non-solicitation provision, an appellate court upheld a trial court interpretation that he did not separate from his employment, because his employment ended when the contract expired.

What “separated” actually meant was so contentious it required several court’s review and significant legal fees.

Why ask an employment attorney to review and help you negotiate contract language?

Whether your first position or a mid-career advancement, you probably do not deal with legal terminology used in an employment agreement frequently. An experienced employment attorney knows what can go wrong and thus can help you anticipate and avoid mistakes and potential pitfalls on the front end.

Who should seek a review?

Any C-suite executives in the hospital or clinic setting, including CNOs and CMOs. Practice managers and physicians of all specialties can benefit as well.

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