Nearly every physician employment contract contains a provision that allows either party to terminate the agreement for any reason with a certain amount of notice to the other party. The typical amount of without-cause termination notice is either 60 or 90 days.
Terminating employees is an important business decision. There are two types of terminations: with cause and without cause. To fire someone for violating company policies or committing unethical acts can be justified as termination with cause. However, firing them for poor performance alone may not be enough to discharge the employee; this type of dismissal should fall under “termination without a call.” You must understand which kind you’re terminating before making a final decision. For this reason, it’s a good idea to consult legal resources such as FindLaw to ensure you’re adhering to the legal requirements.
Terminating an employee without cause is a common practice among private employers. This type of dismissal can occur for several reasons, such as budget problems or operational restructuring and downsizing. The phrase “termination with cause” might be more accurate since the employer has grounds to fire someone who isn’t performing up to expectations or meeting specific criteria laid out in their contract; however, they do have this right under work-at-will laws present in some form across all 50 states unless moving forward would violate state or federal employment law.
How Does a Physician Provide Notice?
There will be a Notice Section in every physician employment contract. This Section will detail how notice can be given: personal delivery, certified mail, email, fax, etc. The physician must provide written notice of intent to terminate the agreement. A verbal warning is not sufficient.
Considerations With Longer Notice
- Greater than a 90-day notice
- More time to prepare for a new job (travel, credentialing, etc.)
- Awkward work environment
- Hostility from employer
Considerations With Shorter Notice
- Less than 90 days’ notice
- Less interaction with the employer
- A new employer does not have to wait a long period for the physician to start
- Not enough time to prepare for a new job (tail insurance, credentialing, housing, etc.)
The term of the employment agreement refers to how long the contract lasts. Most physician employment agreements are between 1 to 3 years, with automatic renewal after the initial term ends.
Contract duration clauses are often found in employment contracts to outline how long the contract will last. It is typically done indefinitely, but that could also be included if there was a specific date on when it would end. Harvard Law School’s Contract Law page is a relevant resource exploring contract terms further.
An example of this might include someone being hired with no specified term length and then coming back after they have completed their degree or reached some other goal set by both parties so that work can resume again more easily without having to start from scratch every time something happens outside their control like graduating college in four years instead of six because you were able to go part-time while working during your first two years before going full-time once classes stopped for summer break.
Using a duration clause when defining an agreement \’s effective period would be wise. It can help you protect your interests should the contract need early termination and also helps clarify what type of early termination is possible for both parties involved. It includes things like whether or not it will end on its own accord at some point if any specific events trigger an automatic expiration date (such as a breach), and more!
When creating a contract, both parties should know what the terms are. If there is a duration clause in place, it’s common for either party to be able to renew with one another if they desire. As long as you spell out your conditions within the duration clause, this can also prevent any confusion about when their time will expire and how much notice must be given before termination of service takes effect. A valuable resource for additional information on employment law and contracts is the Department of Labor’s website.
Only some contracts have a precise end date, but those that do usually allow flexibility on behalf of both parties, who may have desires to continue after expiration or wish not to terminate before its conclusion. You could always include these personal clauses in the main document, explaining them clearly so everyone knows where they stand at all times- including yourself!
For Cause Termination
Companies usually have an employee handbook to outline the standards of behavior expected from their employees. A separate code of conduct may also be in place, outlining specific incidents for termination should they happen within a company or on its premises. Common causes that lead to immediate dismissal include violence and drug abuse. Still, theft is not uncommon either, as well as sexual harassment, depending upon the severity and number of offenses committed by one individual. The more severe cases typically result in automatic termination with lesser violations which might require progressive warnings before finally being terminated if it reaches a point where other options are no longer viable.
When the Length Does Matter
The one instance where the initial term of the agreement matters is if the physician must repay a sign-on or relocation bonus if they leave within the initial period of the agreement. The deal will dictate how much of the sign-on bonus is forgiven based on the length of the physician’s employment. For instance:
- If the initial term is 24 months, 1/24 of the sign-on bonus is dismissed each month.
- If the initial period is 36 months, each year completed will forgive 1/3 of the sign-on bonus.
- If the physician does not meet the initial term, they must repay all the sign-on bonuses.
Set Term With the Employer
Simply put, not all employees enjoy the same protections when it comes to employment. It is why it’s so essential for individuals negotiating a contract to be fully aware of their options before committing themselves and signing on that dotted line. For example, an at-will employee can potentially get let go with no notice whatsoever if they don’t do what their employers want them to do—think back from your favorite show where someone gets fired because she didn’t sell enough lemonade in one day! Meanwhile, some contracts specify fixed terms like two years or more; these agreements will detail specific reasons and probation periods (if applicable) for termination without cause should either party fail to uphold certain obligations set forth by this agreement.
When an employee must quit their job, they are obligated to give notice that the relationship is ending. It ’s typical for a physician to provide between 60 to 90 days notice before terminating employment so both parties can prepare accordingly.
An employment contract is a formal agreement between an employee and an employer in which they agree to work together. Fixed-term agreements are one type, but there are other types for jobs with more fluid timelines, such as hourly wages or commissions based on performance.
Employees can be terminated early in a fixed service contract if the employer provides valid reasoning and proof. However, employers must provide evidence that an employee was not fulfilling their obligations before termination can occur.
For instance: If an employee wasn’t providing services agreed upon in a contract but had been given sufficient time for absences due to illness or injury, then they could cancel it without giving notice; however, if either party provides no reason, this would fall under “\constructive dismissal.”
An employee who signed a fixed term of employment has certain rights when considering being dismissed from work earlier than expected based on agreement with the company during negotiation stages- one such right relates to whether or not duties were met as per the original terms set.
Physician Employment Agreement Review
Contracts are a pervasive and obligatory part of nearly all business and legal transactions. Well-drafted contracts help to enumerate the responsibilities of the involved parties, divide liabilities, protect legal rights, and ensure future relationship statuses. These touchstones are even more crucial when applying their roles to the case of a physician employed by a hospital, medical group, or other health care provider. While contract drafting and negotiation can be long and arduous, legal representation is necessary to protect your rights.
The present-day conclusion is simple: A physician should only enter into a contract with the agreement reviewed by legal counsel.
There is too much at risk for a physician to take contract matters into their own hands. In addition to the specific professional implications, contract terms can significantly impact a physician’s family, lifestyle, and future. There are many essential contract terms and clauses which can present complex and diverse issues for any physician, including:
- Non-compete clauses
- Verbal guarantees
- Insurance statements
Additionally, often the most effective terms and clauses in any employment contract are the ones that are not present. With the advent of productivity-based employment agreements, any physician must have an employment agreement reviewed before they execute it. Attorney Robert Chelle has practical experience drafting and reviewing physician contracts for nearly every specialty.
A thorough contract review can benefit new residents, attending physicians, doctors entering their first employment contract, or established physicians looking for new employment. By employing an experienced attorney for your representation, you can ensure that you will be able to fully understand the extensive and complex wording included in your contract. By understanding the contract, you will be better positioned to decide whether you want to enter the agreement, which will affect your career life for years.
The financial benefits gained from having your contract reviewed and negotiated by an experienced healthcare attorney far outweigh the costs of a review. You are a valuable resource, and you should be treated and respected as such. Attorney Robert Chelle will personally dedicate his time to ensure you are fully protected and will assist you in the contract process to represent your interests fairly.
Every physician’s contract is unique. However, nearly all contracts for health care providers should contain several essential terms. If these terms are not spelled out in contracts, disputes can arise when there is a disagreement between the parties regarding the details of the specific term. For instance, if the doctor expects to work Monday through Thursday and the employer expects the provider to work Monday through Friday, but the specific workdays are absent from the Agreement, who prevails?
Spelling out the details of your job is crucial to avoid contract conflicts during the term of your employment. Below is a checklist of important terms that contracts should contain (and a brief explanation of each term):
- Practice Services Offered: What are the clinical patient care duties? Are you given time for a review of administrative tasks? How many patients are you expected to see (like in pediatrics)?
- Patient Care Schedule: What days and hours per week are you expected to provide patient care? What is the surgery schedule? Are you involved in the planning of your schedule?
- Locations: Which facilities will you be scheduled to provide care at (outpatient clinic, surgical sites, in-patient services, etc.)?
- Outside Activities: Are you permitted to pursue moonlighting or locum tenens opportunities? Do you need permission from the employer before you accept those practice of medicine-related positions?
- Disability Insurance: Is disability insurance provided (short-term and long-term)?
- Medical License: Will the practice offer reimbursement for your license? Will an advisor be provided?
- Practice Call Schedule: How often are you on call (after-hours office call, hospital call (if applicable))?
- Electronic Medical Records (EMR): What EMR system is used in medicine? Will you receive training or time to review the system before providing care?
- Base Compensation: What is the annual base salary? What is the pay period frequency? Does the base compensation increase over the term of the Agreement? Is there an annual review or quarterly review of compensation?
- Productivity Compensation: If there is productivity compensation, how is it calculated (wRVU, net collections, patient encounters, etc.)? Is there an annual review?
- Practice Benefits Summary: Are standard benefits offered: health, vision, dental, life, retirement, etc.? Who is the advisor of human resource benefits?
- Paid Time Off: How much time off does the job offer? What is the split between vacation, sick days, CME attendance, and holidays? Is there an HR guide?
- Continuing Medical Education (CME): What is the annual allowance for CME expenses, and how much time off is offered?
- Dues and Fees: Which business financial expenses are covered (board licensing, DEA registration, privileging, AMA membership, Board review)?
- Relocation Assistance: Is relocation assistance offered? What are the repayment obligations if the Agreement is terminated before the expiration of the initial term?
- Signing Bonus: Is an employee signing bonus offered? When is it paid? Do you have to pay it back if you leave before the initial term is completed? Are student loans paid back? Is there a forgiveness period for student loans?
- Professional Liability Insurance: What type of liability insurance (malpractice) is offered: claims made, occurrence, self-insurance?
- Tail Insurance: If tail insurance is necessary, who will pay for it when the Agreement is terminated?
- Term: What is the length of the initial period? Does the Agreement automatically renew after the initial term?
- For Cause Termination: What are the grounds for immediate termination of the cause? Is a review provided to dispute the termination?
- Without Cause Termination: How much notice is required for either party to terminate the Agreement without the case?
- Practice Post-Termination Payment Obligations: Will you receive production bonuses after terminating the Agreement?
- Non-Compete: How long does the non-compete last, and what is the prohibited geographic scope?
- Financial Retirement: Is a financial retirement plan offered?
- Non-Solicitation: How long does it last, and does it cover employees, patients, and business associates?
- Notice: How is the notice given? Via hand delivery, email, US mail, etc.? Does it have to be provided to the employer’s attorney?
- Practice Assignment: Can the employer assign the Agreement?
- Alternative Dispute Resolution: If there is a conflict regarding the contract, will mediation or arbitration be utilized? What is the standard attorney review process for conflict? Who decides which attorney oversees the process?
Coming into a new organization with a favorable contract can put the physician in a positive financial situation for years. Contact Attorney Robert Chelle for assistance before signing the most important contract of your life.
If you have questions about your current medical malpractice policy or are interested in reviewing your employment agreement, contact Chelle Law today.
We are a dedicated team of legal professionals specializing in physician contracts at Physician Contract Attorney. With years of experience in the healthcare industry, we deeply understand the challenges faced by physicians when navigating complex employment contracts. Our mission is to ensure that our clients are protected and well-represented. We focus on providing sound legal advice tailored to your unique needs, empowering you to negotiate your contract with confidence. For more information or to schedule a consultation, please reach out to us today.