It is common practice for physicians, regardless of their specialty, to sign a physician employment contract. Hospitals, healthcare groups, and private practices alike put contracts in place to protect both the employer and the physician.

In many cases, signing a physician employment contract is a cause for celebration and congratulations. It usually means that you’re about to start a new position that you’re excited about.

But what happens if you sign a contract and, in your first week, realize the job is not a good fit for you?

What do you do if you sign a contract then get a better job offer that you’d rather take?

Physician contracts are binding legal agreements — but there are some ways out of them.

The question becomes, is that contract worth breaking? What will be the ramifications for doing so?

Today we’ll guide you through the process of what to think about and how to decide whether you should get out of your current contract.

Here’s what a physician should do if they just started a job and got another offer.

Table of Contents

Contracts Can Be Broken, But Should You Break Yours?

Contracts are binding, but you still have free will as a physician in the United States. So if breaking your contract is what you want to do, you can.

But don’t expect it to be easy.

Breaking a contract often comes with a cost. In some cases, there may be an actual dollar figure that you’ll have to pay. In other cases, there may be restrictions that you need to abide by.

Before you march into your HR department with a resignation letter, hire a lawyer. A contract attorney will be able to help you navigate your contract. They’ll identify spots where you may be forced to suffer some consequences for doing so.

When it comes to employment contracts, the best thing you can do to protect yourself is to hire a contract review specialist before you sign one.

A contract review specialist can help you negotiate more favorable terms. That can be extremely beneficial should you have to end the contract early.

Why Physicians End Contracts Early

So why do physicians break contracts or leave a job before their end date arrives?

There are quite a few reasons:

You’re offered a position in a more desirable location, in a better hospital, or an area closer to your home

You’re given a more significant opportunity for advancement

The scheduling is better

The employer is making significant changes in practices and policies

Your employer just got bought out or is about to merge with another group

The pay is better, the benefits far surpass what you’re currently receiving, or there’s a hefty sign-on bonus that’s almost impossible to refuse

We could go on and on.

The reasons why physicians may want to leave their current role for a new one are endless. In some cases, physicians work just a few days in a new job and realize that it isn’t the right fit for them.

So when a new offer comes along to work in another hospital or practice, it can be tempting to want to break that contract and run to the next opportunity.

But the grass isn’t always greener.

Before you break your contract, there are quite a few things to consider.

Many Doctors Leave a Job for a Better Offer

The main reason physicians leave a job is that they’ve received a better offer.

A better offer doesn’t necessarily mean better pay; it could be any of those reasons we specified above (better location, better benefits, a shorter commute, the option to work in a smaller group or a more considerable practice, etc.).

But how many physicians actually do leave their jobs? Is it common for physicians to want to leave their current company for a new company or a better offer?

It’s a lot more common than you may think.

Today’s Hospitalist reports: “According to recruiters, as many as 70% of physicians across all specialties change jobs within their first two years.”According to a study of 500 physicians by healthcare recruiter Jackson & Coker, over half of physicians left their first job after five years, and more than half of those stayed only one or two years.A 2019 survey by The Medicus Firm found that 26.2% of respondents are definitely or likely to make a career change in the next 12 months.

And it’s easy to understand why.

Physicians just out of residency may be tempted to accept their first offer, even if they haven’t heard back from their first choice employer yet.

The job search process can be exhausting. Accepting the first job that comes your way may seem the easiest and best financial choice to make at the moment. But it’s not always the right one.

Is It Better To Stay?

The “grass is greener” syndrome is real. Yet as tempting as a new offer may sound, it’s crucial to think about what the long-term effects of taking that offer could have on your career.

The medical community, especially if you plan to live and work in the same city your entire life, tends to feel rather small. Leaving one contract simply because you got a better offer could be appealing in the short term, but may not be best for your long-term career goals.

If you burn too many bridges early on in your career, you’re likely to find it more and more challenging to receive new job offers in the future. Do it often enough, and you’ll get the dreaded title of “job hopper.”

Be extremely careful whose toes you step on, which healthcare groups you walk away from, and what professional ties you cut along the way. Especially when you’re fresh out of residency and just starting out.

No matter how much you might want to take that new job offer, sometimes staying where you are is the best plan.

What If Leaving is the Better Option?

There are instances where leaving may not only be the best option but your only option.

Perhaps you’ve been offered a job that would allow you to move back to your hometown.

Maybe your spouse has w
anted to relocate for a better job, and your new offer finally puts you in the position to agree to move.

Or it could be something more simple. Like working fewer hours, having a more flexible schedule so you can raise a family, or earning double the pay you’re currently making.

It’s vital that you really think about the pros and cons of staying vs. leaving your current job.

A $10,000 salary increase may not be a good reason to leave, but your dream job in the city you’ve always wanted to live in may be worth making the sacrifice.

While you’re thinking it over, check out Your Complete Guide to Physician Compensation.

The Alternative to Breaking a Contract

Depending on your reasons for wanting to leave, there’s an alternative to breaking your existing contract and accepting that new job offer:

Negotiate your contract.

Once you’ve signed a contract, you’re bound to it, at least until the end date, at which point it can be renewed or renegotiated.

Some contracts are short (one or two years in total) and are renewable at the end of the period if both you and your employer choose to do so. Think about this before signing an extended contract, as a shorter contract will allow you to renegotiate it sooner.

If you can stick with your job until it’s time for contract renegotiation, it’s usually best to do so. When the new negotiation process begins, you can ask for better pay, better benefits, or different hours.

In the meantime, if you are having issues related to your colleagues or to work itself, discuss them with your boss. Try to work out those kinks, improve upon the problems driving you crazy, and form better relationships with your colleagues.

If you can’t do that, you may just find yourself in a similar situation when you start your new job.

It can also be helpful to seek career advice from a mentor or a respected colleague.

Be honest and let them know that you’re considering taking a better position. It can be tempting for millennials and new physicians to want to advance their careers as quickly as possible. Still, an experienced physician may be able to guide you on better practices that can help your long-term career.

Breaking a contract will undoubtedly have some consequences. It’s usually best to do what you can to improve the situation before walking away from it completely.

Review Your Contract Before You Decide to Leave

Before you decide to end your contract, consult with an attorney. There are a few key clauses in your contract that can have big implications, and an attorney will be able to explain these to you in-depth.

Termination Clause

Almost every contract includes a termination clause that provides a notice period. Don’t assume you only have to give two weeks’ notice. Some contracts may specify that you have to give 30 days or even more. After reviewing tens of thousands of contracts, the most common timeframe we have seen is 90 days.

Notification Procedure

In addition to the notice period, make sure you understand the notification procedure.

You may have to submit your request in writing to a specific person or fill out a series of particular forms. If breaking your contract is what you want to do, make sure you follow the protocol to the letter.

Malpractice Tail Insurance

Get out of your contract early, and you just might have to cover the cost of malpractice tail insurance.

Tail insurance is for covering a physician in case a patient sues for malpractice after the physician is no longer employed with that hospital or practice.

Restrictive Covenants

Almost all employment contracts include restrictive covenants, such as non-compete clauses and non-solicitation agreements. Make sure you understand your restrictive covenants. If you don’t, you might not be able to accept the new job offer within a certain radius of your old job.

Repayment Obligations

Breaking a contract early can cost you financially. If you received a signing bonus, you might have to pay it back. You may also have to pay back relocation allowances that the hospital or practice paid you to move.

Ethical Violations

Break your contract, and you may also risk violating ethical standards.

Patients deserve a certain level of care, and abandoning a patient in medical need can have serious consequences. You cannot merely leave your position. (Unless your patients have had sufficient opportunity to seek care from another physician.)

In most cases, this would only be an issue if you quit on the spot, but it is something to keep in mind, nevertheless.

Income protection is very important. Learn about Disability Insurance for Physicians to ensure you’ll keep receiving income during an emergency.

Create an Exit Strategy

So you’ve made up your mind: you’re definitely breaking your contract and taking that new job offer. Now what?

It’s time to create an exit strategy.

Meet with an attorney to discuss your obligations as detailed in your contract.
Be prepared to pay for any expenses you are liable for.
Follow the law, as stated in your agreement and as explained by your legal counsel.

Contracts can be broken, but you’ll need to take all of the precautionary steps to make sure you’re protected as much as possible.

Make Sure You Have the New Job Before You Leave Your Current One

Never break your contract, give notice, or leave your job until you have a definite offer and a new contract from your new employer. Otherwise, you’ll have no way to protect yourself if that great new offer falls through.

Never rely on vocal commitments alone. If you haven’t been thoroughly vetted through the interview process or haven’t received a contract in writing, you can’t be sure that the new job is officially yours. Until you sign a contract, you are under no obligation to your new employer, nor are they under any obligation to you.

The bottom line is this:

Do not leave your current position until you are 100% certain that the new job is yours.

Review what you should do before and during the interview process by downloading this Physician Employment Interview Kit ebook.

Breaking a contract can be done, but it can also put you in a sticky situation. And since you can’t foresee the future, it’s best to think about the possibility of wanting to end your contract early before you even sign it.

The next time you’re presented with a physician contract, hire a contract review specialist to review it. Without the proper review, you could face even bigger challenges if you take one job and want to leave it after a few weeks for a better opportunity.

Contact Physicians Thrive now for more guidance and information on physician contract reviews and how to protect yourself
during the negotiation process.

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