Contract Review – Can I Get That In Writing?

In previous posts, I’ve highlighted the importance of understanding certain language in an employment contract that could come back to haunt you if not handled correctly. We discussed the forgiveness period as it pertains to loan repayment and the difference between “claims-made” versus “occurrence” malpractice insurance. But what other terms and conditions in your contract are either unclear or simply missing altogether? Remember, if a dispute arises, the written contract will trump an oral agreement.

5 Employment Contract Traps Doctors Fall Into

1) Work Obligations – Always seek a clear written understanding of your day-to-day work duties, arrangements such as rotation schedule and on-call duties, and the level of non-patient work activities expected of you.

2) Termination Provisions -Look closely for any vague, one-sided language that could be interpreted one way by your employer and another by you. What are the conditions by which you can be terminated? What is a “material” breach of contract? How is an accusation of “improper actions clause” defined and handled? All of these (and much more) need to be clearly spelled out in easy to understand language.

3) Compensation – You may think that this is pretty straightforward, but it pays to be specific when it comes to compensation and bonus plans, especially when income is not calculated as a straight line salary. We often see complicated formulas for compensation that take into account the expected number of patients to be seen, profitability of the practice, and the ability to attract new patients. This section of the contract is especially geared toward protecting the employer. Get definitions for any terms that you don’t understand, such as percentages and positive net income.

4) Terms and Conditions of Employment – Before discussing compensation, it’s wise to lay the groundwork for a satisfying employment experience by defining the conditions of employment. For example, having a clear expectation of duties to be performed along with the resources and support needed to be successful. All of these should be in writing to ensure your success. With this in mind, you will have a better idea if the compensation package is fair.

5) Supplemental Income – In today’s economy, it’s increasingly common for a physician to moonlight on the side as the need for additional income arises. Look for exclusivity provisions that prevent you from doing so, whether you plan to work on the side or not. While there are degrees of enforceability for this kind of provision, it is preferable to know about it in advance if this is a consideration for you.

If there is one main idea we stress, it is this: employment contracts are written to favor the employer, so do not be afraid to challenge and negotiate for what is in your best interest. This short list is by no means exhaustive. There are many local, state and other variations in employment law to take into consideration. Please consult an advisory group that specializes in contract law for matters relating to your specific situation.