Insight for Newly Hired Physicians

Now more than ever, doctors are choosing to work for others instead of owning their own practice. At the same time, physician contracts are not being renewed or are being terminated more frequently. Termination is happening on both ends, with one-quarter of doctors leaving their practices within three years, according to recent data compiled by a large health-care recruiting firm. With the current trends in health care employment, it is crucial for physicians to protect themselves in negotiating smart and secure employment contracts.

At the most recent American Medical Association (AMA) Annual Meeting, there was an educational session about contract negotiation for physicians. This invaluable protection for physicians upon termination begins with contract negotiation before their employment begins. Following are a few key issues for physicians to consider before signing on the dotted line.

Types of Physician Contract Termination

Physician employment contracts are either terminated for cause or without cause. When a contract is terminated for cause, it means an employer or employee violated specific terms or promises included in the contract.  Termination without cause can be used by both the employee and employer to end a contract for a variety of reasons not stipulated in the contract.

What to Consider When Negotiating Physician Contracts

 When a contract is terminated, physicians may be unpleasantly surprised with expenses they had not fully considered. Physician compensation models determine how employees are paid based upon a complex formula measuring productivity and efficiency, among other factors. Upon termination, physicians who have not met certain standards or obligations may owe their employer money or time. Negotiating terms of compensation upon termination at the start of employment can eliminate hefty costs at the end.

Physicians also need to consider future employment when agreeing to a contract.  Contracts that include a non-disparagement clause prevent employers from giving damaging references for employers who leave. Non-disparagement clauses are particularly helpful when physician contracts are terminated for cause because these usually happen as a result of a dispute between an employer and an employee.

Finally, and perhaps the most complicated piece of a physician employment contract, is a non-compete clause, or restrictive covenant. Restrictive covenants limit where a physician can practice once they leave a place of employment. They can have far-reaching ramifications for a physician’s career. Non-compete clauses are highly complex and should address several factors, including how and why the contract was terminated, if the restrictions create a hardship on the physician, and if the public interest is at stake by the limitations placed upon the physician. An experienced health care lawyer can advise a physician through the process of negotiating their employment contract to ensure they are fully protected.

Philadelphia Health Care Lawyers at Sidney L. Gold & Associates, P.C. Dispute Physician Employment Contracts

When an employee and employer are unable to agree upon the terms of termination, legal intervention is necessary. Both parties can pursue mediation, binding arbitration, or litigation, depending on the dispute and what is at stake.  Philadelphia health care lawyers at Sidney L. Gold & Associates, P.C. will protect your interests by taking the best legal course of action available. Schedule a free consultation by calling 215-569-1999 or by contacting us online.