Doctor Employment Lawyer Blog

Physician Employment Contracts have unique issues, but most doctors look at the compensation provision and sign. It's understandable that a physician might think that his/her pay is the most important aspect of the employment agreement, but in fact there are issues that might make it difficult to ever move on to a new employer or start your own practice. While there are a number of concerns a doctor should address before signing an employment contract, below are the top five issues:

1. Malpractice insurance: Occurrence based or claims based? If the coverage is claims based, you will likely be responsible for purchasing tail coverage to continue coverage after termination of your employment. This can be extremely costly.

2. Duties: You may think that your duties are obvious or self explanatory, but every practice has its own way of divvying up responsibilities. You may have administrative duties for which you are responsible that require a large investment of time. If you don't address this before signing, you are agreeing to those responsibilities without question.

3. Non-Compete Agreements: Many doctors don't understand how far their non-compete agreement really covers. By signing your employment agreement, you may be restricting yourself from working in the same metropolitan area for some time after your employment ends. At the very least you should be cognizant of where you can and can't work in the future.

4. Non-Solicitation Agreements: You may have already spent years building your reputation and patient base, but most physician employment agreements explicitly state that all patients that visit the practice belong to the employer. If you are bringing a significant number of patients to your new employer, you should at least protect your future relationship with those patients.

5. Marketing: Many physicians have the mindset that patients will just show up. In today's environment, doctors have to market just like everyone else. If your compensation is dependent at all on productivity, you need to be certain that your practice is going to be marketed to the public. This isn't an exhaustive list, but being aware of these issues can help a physician negotiate a contract that he/she is happy with throughout the employment relationship and beyond.

When a physician signs an employment agreement that includes a non-competition provision, the doctor should be aware that such an agreement will limit his/her opportunity to practice medicine in the future. Even when a radius seems small on paper (i.e. five miles or ten miles), the actual area covered by the agreement may encompass the majority of hospitals or employers in an urban area. Furthermore, many of these provisions exclude you from working for a competitor even when your employment is terminated by the employer without cause.

A non-solicitation provision can have a similar effect. Employers often draft these provisions in a way that makes it difficult to promote yourself when you are forced to secure new employment. If you are restricted from sending announcements or initiating any contact whatsoever with former patients, can you really build a new practice?

If you are negotiating an employment contract with a large institution, it will likely be difficult to negotiate a narrower application of the restrictive covenants. However, this should not deter you from making some effort. At a minimum, you should request that the restrictive covenants be nullified if your employment is terminated without "cause." In addition, you should be careful that "cause" is clearly defined in the agreement so that there is no question as to whether you may promote yourself.