Doctor Employment Lawyer Blog

The contract to contract is like the meeting before the meeting. It's the initial offer whereby the big terms are agreed upon before the nitty gritty details are discussed.

Many practice groups use an initial offer letter to lock down key terms before sending a physician a proposed Employment Agreement. This allows the practice to lock in salary and certain benefits before going down the road of negotiations. However, when reviewing an offer letter, doctors should be cautious not to bind themselves to terms about which they have not really agreed.

While compensation is not always the most important item in an Employment Agreement, it is the most important item in the offer letter. This is because, by signing the offer letter, the practice typically will take the position that compensation has been determined.

Of course, your signature on an offer letter does not prohibit you from revisiting issues. Just because you signed the agreement to agree, does not mean you really have to agree. However, signing the offer letter should be the first step in a long term employment relationship. And, it's never good to start by reneging on an initial agreement.

Most physician employment contracts allow either party to terminate the agreement at any time by giving a certain amount of written notice. The notice period is typically 90 or 180 days. However, many physicians do not understand that the notice period is not a guarantee that he or she can work through that period.

I recently spoke with a physician who was shocked when her employer exercised the 90 day notice period by providing written notice and asking her to immediately leave the practice. The physician was paid during the notice period, but no notice of her departure was provided to patients or referring doctors. She was understandably upset because her patients were left with the impression that she did not even give them the courtesy of letting them know she was leaving.

This physician had believed that the notice period was a promise that she could continue to work for her employer during the 90 day period and use that time to inform patients and referring doctors of her departure. Instead, she was discovered that, as long as she was paid through the notice period, the employer was not under any obligation to allow her to treat patients during that period. Nor was her employer required to work with her to notify patients or referring doctors of her departure.

Leaving a practice without any notice to your patients or referral relationships is likely to damage relationships that may have taken years to cultivate. Patients don't usually understand that the employer owns patient information and a doctor likely will not have access to such information after leaving a practice.

The lack of notice can be damaging to the employer as well. Patients often impute the conduct of a treating physician to the practice as a whole. Leaving a patient wondering what happened to his or her physician is not likely to create a trusting doctor-patient relationship.

Working out an agreement about how to notify patients and referring physicians regarding a physician's departure at the start of the employment relationship is beneficial to all parties. It allows the doctor and the employer to protect their reputations and minimize patient confusion. It ensures patients are informed about whom they can contact about their treatment issues. And, it ensures that referring doctors know who will be taking over the departing physician's practice.

Of course, trying to work out those details at the end of an employment relationship is usually an exercise in futility.

I recently heard a story about a surgeon who accepted her first attending position without having a full understanding of her contract and the employer's expectations. It turned out that the employer expected her to take on all of the grunt work for the senior attendings. She was miserable and didn't have a lot of options given that she agreed to a non-compete and was not interested in moving.

In the excitement of finding your first job or a new job for that matter, there is often a rosy view of the future that prevents people from asking all of the questions that will affect whether the employment relationship is successful. And, while asking questions does not guarantee you will get honest answers or a realistic perspective, the answers usually provide some insight into the employer's culture.

Many hospitals start the hiring process by providing a physician with a Memorandum of Understanding. This documents usually lays out all of the terms that will be formalized in the final employment agreement. Since the Memorandum of Understanding is not an employment agreement, many physicians mistakenly believe that they can sign without obligating themselves to anything that would affect the employment agreement.

Memorandum of Understandings are the first step in the process of negotiation. It is the document that defines the basic provisions of the agreement. Often times, it will set forth key items such as the term of the agreement, compensation, duties, malpractice insurance, and even restrictive covenants. While it's true that the memorandum is not binding, signing it signals to the hospital or practice that you accept the details of employment as written and they can proceed to use those provisions in the final agreement.

Attempting to negotiate terms of the employment contract after you agreed to such terms in the memorandum puts a physician at a serious disadvantage. You're not barred from negotiating provisions, but you likely lose some credibility if you agree to terms in one document, but reject them in the actual contract.

Even doctors make bad decisions when it comes to employment. Whether it's signing an employment agreement without understanding the terms, taking on a position with a hospital or clinic that doesn't operate the way you thought, or joining a team that doesn't share your values; sometimes you just end up in a place at which you don't want to be.

If that time comes and you are a party to a non-compete agreement, you need to know whether the agreement is enforceable and, if so, where you can or cannot work. In Illinois, there is often a mistaken perception that non-compete agreements are not enforceable. However, the case of Mohanty v. St. John Heart Clinic, S.C., 225 Ill. 2d 52, 866 N.E.2d 85 (Ill. 2006), the Illinois Supreme Court affirmed the enforceability of restrictive covenants for physicians. In that case, the court concluded that reasonable restrictive covenants amongst physicians do not limit patient access to physicians and encourage established physicians and practices to hire and train less experienced physicians. The court further determined that a decision to ban such agreements amongst physicians should be left to the legislature.

At the same time, not all non-compete agreements are written in a way that is reasonable and enforceable. Knowing what you an and cannot do before you move on and accept another position ensures that you avoid unnecessary legal expenses associated with defending a claim that you breached your agreement. At the very least, you should read your agreement carefully before accepting a new position.

I recently heard a story about a General Surgeon who signed her private practice employment contract without reading anything other than the compensation section. It turns out that the agreement she signed states that she was hired as a Primary Care Physician.

While this may not affect her employment at first, it could be an issue is things between her and her employer ever turn sour. Just like any other career, when a doctor starts a new job everything is exciting and positive. However, after the honeymoon phase ends and both sides reveals their flaws, things may not be so rosy. Errors like this one in your Physician Employment Contract could give your employer an opportunity to terminate your employment without any of the benefits for which you may have contracted.

Furthermore, if the employment contract is so inapplicable that even your specialty is incorrect, what else may be wrong? Are call duties clearly spelled out? Is the non-compete limited in scope? These are all important issues that can affect your employment and your future career. Make sure you know what you are getting into before you sign.

Many physicians are asked to sign non-compete and non-solicitation agreements by their employers. When you are staring a new job, this sort of thing may seem typical or unimportant, but when you leave to pursue a new opportunity, you may realize that such an agreement can effectively keep you out of the marketplace.

If you have signed a non-solicitation agreement and are moving to a new practice, you likely want to send out an announcement to all of your past patients inviting them to come see you at your new place of business. This may seem like a great idea, but there is a lot of potential liability if you violate the terms of a non-solicitation agreement.

Some of these agreements are narrow and specific in that they only prevent you from actually soliciting patients, meaning you cannot ask your patients to switch to your practice, but you may be able to send out announcements advising them of your new location or offering to assist them in continuing their care at your former practice.

At the same time, many employers are going to greater lengths to protect their investment in practice developments. These agreements are drafted in broad terms and specifically prohibit you from even sending announcements to your patient list. Some such agreements even go so far as to attempt to prohibit you from initiating any communications whatsoever with patients. Whether or not a court would uphold such a broad provision depends on the language, and the court.

Make sure that you understand to what you are obligating yourself before you sign a non-solicitation agreement. And, at the very least, try to negotiate an exception for patients that you bring with you to your new employer.

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.