As a healthcare and business law firm, we routinely review and analyze employment agreements for physicians and other providers both when negotiating an agreement and after a dispute has arisen. Through our experience, we have developed tips and learned what is common, what is likely to cause disputes, and what is important in a practical sense for our provider clients. This post intends to outline three practical questions we believe important for our provider clients to consider when reviewing employment opportunities.
Question 1: Can I Complete all Contingencies Prior to my Start Date?
First things first, as a physician or other medical provider, you will necessarily be required to hold licenses, certifications, memberships, hospital privileges, provider numbers, etc. prior to providing services. Especially for providers just completing training, it is important the agreement allows you sufficient time to complete all contingencies before employment begins. If you are hesitant about your ability to complete the requirements before the start date written in the contract, there are changes to the contract you may be able to request, although there is no guarantee the employer will accept. First, you can request a later start date to give you sufficient time. Second, you can ensure there is language recognizing that the parties may agree on a later start date without terminating the agreement. Although the parties almost always have the option to modify contract terms, including language specifically referencing the ability to modify the start date is useful to set clear expectations. In our experience, clear expectations help avoid future disputes.
Question 2: Can I Live with the Noncompetition Clause?
Noncompetition provisions generally include three subjects: the type of practice covered by the restriction, the period of time during which it applies, and the geographical area that it encompasses. We generally ask our clients to decide whether they could live with the restrictions if the noncompetition clause as written were to apply. For example, if the noncompete would force you and/or your family to move to a new city, that might be a deal breaker. Linked here is a useful tool where you can map out the applicable radius as the crow flies to see exactly the geographical area covered.
If the noncompetition clause is realistically too broad for you, there are a few options you may be able to present to your employer. First, you could request the employer reduce the mileage or otherwise narrow the geographical area. Second, you could request that the noncompetition clause not be triggered if your employment ends through no fault of your own (e.g., you are terminated without cause or you terminate the agreement because the employer breached). There may also be creative ways to carve out from the provision certain facilities or specialties that may make the covenant more palatable.
Question 3: Can I Get Out of this Employment Early Without Severe Penalties?
We also ask our clients to consider what would happen if they needed to terminate the contract early. The main point here is whether there is a provision allowing mutual termination without cause. There is almost always a provision allowing the employer to terminate without cause upon providing notice. Sometimes, however, employers do not offer the same ability to the employee. In those situations, the employee is potentially stuck in the contract until the term ends, which for physician employment contracts is routinely two or three years. As such, we often suggest clients request a provision allowing them to terminate without cause.
Another item to consider here is what amounts you may have to pay back if you terminated early. For example, if you received a signing bonus, you may have to reimburse the employer. If the contract requires you to pay back the bonus in full regardless of how long you provided services, you may be able to request that the employer require only a pro-rata portion of the bonus to be returned upon an early termination.
Our attorneys are experienced in advising clients on employment matters, including employment agreements. If you have questions about an employment opportunity or would like to discuss this blog post, you may contact our healthcare and business law firm at (404) 685-1662 (Atlanta) or (706) 722-7886 (Augusta), or by email, firstname.lastname@example.org. You may also learn more about our law firm by visiting www.hamillittle.com.
*Disclaimer: Thoughts shared here do not constitute legal advice.