How Do I Get Out of a Physician Contract?

After signing a physician contract, a situation may require the physician to get out of your contract. So, How Do I Get Out of a Physician Contract? It could be because of difficulties within the job itself, with the prospective employer or having unavoidable personal problems. No matter the reason, it is essential for a physician to understand the legalities of terminating employment and how that fits in with his or her signed contract.

A Right to Terminate

Standard contracts have clauses that require a 90-day notice from either the physician or his employer when one or the other wants to end the contract. Sometimes the notice period is 180 days, but the time frame seldom exceeds that. This will occur when it is difficult to fill the position. However, regardless of the period delineated on the contract, sometimes a physician needs to terminate early. For more on this topic, refer to this guide on how to negotiate a physician employment contract.

When a physician is going to leave a position before the notice period ends, the business may just be understanding and work out an agreeable plan, mainly when it is a family emergency or the like. However, if the physician wants to leave early because of a better job offer, this can create problems in the exiting. This could be considered a breach of contract. For further understanding, you may refer to American Medical Association’s guidelines on professional conduct and agreements.

Right to Terminate Clause

Besides a notice period in a contract, it should have a Right to Terminate clause. The term for this is termination for cause and means that one or the other (employee or employer) did not uphold the contract terms. A physician has to ensure they have all the correct wording in a contract so this is fully covered. An attorney can help with a contract review to ensure it is appropriately included.

How to Avoid Problems

The best way to avoid problems on any dismissal of contract is to ensure a contract is reviewed with this in mind before signing. The physician himself can review it, but it is best to have a contract attorney look it over and fix any points that aren’t clear or negotiate changes in the contract, so it is clear and aboveboard.

Failing to Hire a Lawyer with Specific Knowledge of Medical Employment Agreements

Failing to hire a contract lawyer with specific knowledge of physician employment agreements can result in problems. When a physician hires an experienced lawyer, the physician will avoid many pitfalls that can have long-lasting effect on your professional and personal life. For a comprehensive understanding of compensation models, you might want to check this article on physician compensation models.

Understanding Employment Contracts for Physicians

Hiring entities seem to be moving towards taking an employment agreement and standardizing them, trying to simplify matters. However, there is still an opening to negotiate agreement terms. A physician must do so, as the physician will want the agreement to cover the critical points and not be open to interpretation. This is one reason an agreement lawyer is so crucial in the review process of employment agreements. Unfair or ambiguous points of an agreement can be addressed and handled.

Pitfalls to Watch For in a Medical Employment Agreement

Physicians should be careful about the employment agreement language. It can be vague or favorable to the employer and not the employee. It can appear anywhere but is particularly difficult regarding the schedule and duties. When a physician see the words “… will be determined by the practice…” it is time to be wary. The National Institute of Health offers resources on maintaining ethical standards and professional conduct.

Bonuses and compensation based on productivity are another area to review carefully. Any payment of bonuses and incentives should be paid through the time of dismissal rather than a specific date. The wording here is crucial. The benefit start date also should be carefully reviewed, or the physician could get stuck paying COBRA premiums himself until the start date in the agreement of the new employer.

Restrictive non-compete clauses must be reviewed, so it doesn’t keep a physician from working for other specific competitors. These clauses also should be reviewed so the physician won’t be restricted from areas near where he now lives.

Failing to Hire Lawyers to Review Physician Employment Agreements?

Attorneys will be able to effectively review a agreement, making sure anything vague or which is an overreach is modified and made clear and reasonable. All the agreement terms need reasonable boundaries, and an agreement lawyer can ensure this occurs.

Agreeing to Unfair Termination Rules

Agreeing to Unfair Termination Rules is necessary to avoid when signing an employment contract; the physician must understand the laws of dismissal so the physician does not agree to things that can harm the physician later. If  the physician ends up being terminated from a job unfairly, it can be quite a fight to get justice.  Thus, Agreeing to Unfair Termination Rules in a contract is vital to avoiding future conflict.

What is Wrongful Termination?

Wrongful dismissal laws refer to getting fired from a job for an illegal reason. It could be an employer who fires the employee because that person was complaining about safety concerns or discrimination, or it could be an employer who fires an employee because the employee was exercising a legal right. If an employer discriminates against an employee and firing him or her because of disability, race, color, religion or the like, this is wrongful termination.

Wrongful Termination Law for Medical Providers

If someone is wrongfully terminated, they can file a lawsuit. Wrongful dismissal laws allow for damages in some cases for employees. But first they would need to win the suit. If there is a contract which delineates the law about unfair dismissal, this can only help the case.

Breach of the Agreement

It depends on the contact as to whether damages would be available. The contract can also outline when a person can pursue damages in a case. Again, having a contract that outlines all the laws of wrongful dismissal will benefit the physician if they ever run into this situation with a job. You want a contract to be specific so that you are well-protected against anything that ends in your dismissal.  For instance, issues with locums tenens assignments, surgery schedules, select income disputes, practice transitions (like in psychiatry, pediatrics, orthopedic medicine, hospitalist), PA supervision, post employment relationship issues, insurance, etc.

Breaking a Physician Contract with a Non Compete

Physicians with non compete clauses in their contract were initially considered as restraints of trade, and thus were invalid on the grounds of public policy at common law; however, many restraints of trade incident to contracts were upheld based on the rule of reason.  Thus, restrictive covenants between a physician not to compete after termination of employment are generally enforceable as long as it is reasonable.

However, there are a few states which prohibit non compete clauses.  Please review your state laws for non compete rules and regulations to see the specific rules for your state.  The general test for reasonableness of these clauses hold that on termination of employment, a covenant  which restrains an employee from competing with his former employer is termed reasonable if:

  • The restraint is not more than required to protect the employer,
  • It does not inflict any untold of hardships to the employer, and
  • The restraint is not injurious to the public.

Reviews of Non Compete Reasonableness

For instance, in Ohio, a non-competition clause was considered unreasonable after judicial review when it was noted that a provider’s sub-specialty was uncommon, and that it would be harsh if the restrictive covenant were enforced as the hospital where he was precluded from practicing was only one of the few institutions in the area where he could practice his specialty.

Thus, in Ohio, covenants restraining providers from competing with his employer on termination of employment is considered unreasonable if it inflicts hardship on the physician’s ability to practice, is injurious to the public, if the demand for the physician’s medical expertise is vital for the community people and if the physician’s services are essential for the health, care and treatment of public.  However, non-competition clauses for physicians, in general, are enforceable as long as they protect some of the  prospective employer’s legitimate interests.  Having a non-compete review by a lawyer can assist in avoiding legal issues.

Physician Contract Review Lawyer

When an experienced attorney reviews physician contracts, you will find financial benefits that outweigh the review’s cost. Please leave it to the experts. If you need a review of an employment agreement or contract analysis, schedule a Physician Contract Review with Chelle Law today!

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We are committed experts in the field of Physician Contract Review, proudly serving the medical community through our platform at Physician Contract Review. With a profound understanding of the healthcare industry’s complexities, we provide comprehensive contract review services tailored to meet the unique needs of physicians. Our team of experienced legal professionals is dedicated to ensuring that every aspect of your contract is clear, fair, and beneficial to your career. To learn more about our services or to book a review, please contact us today.

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