How COVID-19 Is Affecting Physician Employment Contracts

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While no corner of the medical field has been left unaffected by the COVID-19 virus, physicians around the country are experiencing the effects of the pandemic in different ways. While many pulmonary and critical care doctors are struggling to meet the needs of a growing patient load, other practices are reducing hours, cutting costs, and even closing doors in response to the pandemic. 

As a result, physicians from every specialty are reckoning with unprecedented challenges. Many hospitalists are being reassigned with little notice and expected to work without the proper personal protective equipment (PPE). Meanwhile, private practices are asking physicians to forgo bonuses and accept substantial salary reductions. Employment prospects for new doctors are increasingly uncertain as employers are imposing hiring freezes and even revoking signed contracts at an alarming rate. Amidst this stress and uncertainty, physicians are left wondering: Can my employer do that? What are my options? What about my contract?

If you are an employed physician faced with difficult or unclear choices during the pandemic, you are not alone. By reviewing your contract, understanding your full range of options, and consulting with advisors, you can make the right decisions to protect yourself, your finances, and your future. 

Review your contract.

The first step to navigating any employment dilemma is a professional contract review. If you’re wondering what exactly an employer is allowed to ask of you, whether you have to comply, and what can happen if you refuse, the answers will be fact-specific based on the exact language of your employment contract. Physician employment contracts are lengthy, complex documents, and the details of these documents vary widely from physician to physician.

For example, many new physicians who expected to start working this summer and fall are no longer sure if their employment contracts are secure. In cases such as this, one physician might find that their employment contract goes into effect upon execution, or when the document is signed by both parties, meaning the employer is legally bound to the contract. However, another physician in the same situation might discover that their employment contract only becomes binding upon the anticipated start date, and therefore their employer can revoke the offer without exposure to legal repercussions. 

In rare occasions, a physician’s contract may specify that exposure to communicable diseases is an understood risk of the role. Other contracts may include a force majeure clause, or act of God clause, which releases one or both parties from their contractual obligations in the event of an extraordinary, unavoidable occurrence. Some clauses may limit the definition of force majeure to natural disasters such as flood, earthquakes and hurricanes, while other definitions expand the scope to include war, political unrest, and, notably, epidemics. Force majeure clauses are uncommon, but not unheard of in physician employment contracts, and details like this can affect contractual liability of both physicians and their employers during COVID-19. 

A professional contract attorney can help you review key components of a contract to determine if a breach has occurred. Remember, regardless of a contract’s language, personal services cannot be compelled. For example, if you do not want to work without appropriate PPE, your employer cannot force you to work no matter what your contract says. Similarly, if a practice revokes a binding employment offer, it is very difficult to compel specific performance and make the practice employ you. However, the party in breach may be exposed to legal liability, meaning they could be sued for financial damages. 

Consider the practicalities. 

Once a contract review has assessed your legal ground in an employment dispute, you still have to determine what steps you are willing to take to resolve the issue. Even if you have identified a clear breach of contract, there are many considerations that may determine your next step. Whether you choose to simply accept the breach of contract, negotiate with your employer, or pursue mediation/arbitration/litigation to claim damages, there are costs and benefits to each approach. 

Let’s consider the hypothetical case of Dr. Mendoza, a new physician whose employer breached the signed employment contract by revoking the offer two weeks before the start date.

Depending on the potential financial loss and inconvenience, Dr. Mendoza has several options. If she can quickly find another position in the same city, she might decide to ignore the breach of contract and move on. If she has already relocated, signed a lease, and turned down other offers, this breach of contract could cause serious financial strain while she looks for other jobs. In this case, she may consider pursuing litigation or arbitration with her former employer to claim financial damages. Finally, she may opt to avoid a lengthy, messy legal process by approaching the former employer directly, explaining the situation and damages, and asking for recompense before involving attorneys. 

There is no single course of action that is appropriate or advisable for every breach of contract. Under the extraordinary circumstances of the COVID-19, you may choose to accommodate your employer by accepting modifications to your role or compensation. Alternatively, if your financial security or personal health is at risk, it may be necessary to stand your ground and insist that your employer upholds the agreed upon terms of the contract. 

A final caveat: your contract language cannot protect you from the long-term professional ramifications of refusing to comply with your employer’s request. For example, if your employer decides that you are not a team player, then future performance reviews, contract renewals, and promotion opportunities could be negatively affected. In extreme circumstances, an employer could decide to terminate your contract giving any reason at all, as virtually all physician contracts allow for termination without cause by either party . Before escalating a contract issue with your employer, it is important to consider all potential outcomes.

Consult the experts.

Each practice, each specialty and each physician is being affected differently by the ongoing COVID-19 crisis. As you consider how to approach the professional challenges posed by the pandemic, you need professional insight and expertise. By working with a physician-specific contract attorney and financial advisor, you can confidently navigate the potential options and outcomes of potential contract breaches. 

At Physicians Thrive, our contract review team works exclusively with physicians. As a result, our attorneys and advisors have a nuanced understanding of the effects of COVID-19 on employment throughout the medical field. By providing expert advice, context, and insight, we strive to help physicians make the best decisions for their financial and professional futures. Whether you need a quick clarification about your contract or terms or advice about negotiating amicably with your employer, Physicians Thrive is here to help.

Right now, we are offering special packages on professional contract review for employment issues relating to the COVID-19 pandemic. Contact an advisor today to get started. 

Get your contract reviewed now.

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