Unless you start your own practice after training, you will be signing an employment contract. The contract is critical in bridging the expectations of you and your employer and gives you the chance to lay out what you want from your employment. Your contract is composed of a number of important clauses and provisions, and it is possible that not all of them will work in your best interest. If you see any of these 8 concerning contract items when reviewing your contract, it is probably time to negotiate.
1. Unclear work expectations
In many cases, the contract will have some very non-specific parameters for your actual hourly work expectations. It may state something as simple as “Full-time” or give a minimum hourly range per week. Like many contractual clauses, these hourly/shift expectations should be clearly outlined with objective parameters in your contract. You do not want to be blindsided by shifts that last four hours longer than you originally expected or be required to work on holidays when you planned to have the day off. Work expectations may seem basic, but that is why they often go overlooked and why they deserve to be given close consideration.
2. Unreasonable non-compete
Most physicians who have been through the contract negotiation process have been warned about non-compete clauses. A non-compete restricts you from working within a certain geographic area after your contract terminates. A typical radius would be anywhere from 2 to 50 miles, and will be highly dependent on the setting of your former place of employment (i.e. rural vs. urban). If a non-compete restricts you from practicing within a large radius (50 to 100 miles), especially in a densely populated area, then you need to negotiate for a more favorable clause. An alternative to the non-compete is the non-solicitation clause, where you agree not to solicit any of your former patients to follow you to your new practice. This is usually less restrictive and does not require you to move cities each time your job ends.
3. Delayed benefits
Benefits are a huge part of what draws many physicians to an employed position. In your contract, an employer should offer you a benefits package that includes all or most of the typical components, including health insurance, disability insurance, paid leave, and a retirement plan. These benefits should take effect when you begin your employment, but, in some cases, there can be a delay before you are eligible for certain benefits. Going without insurance coverage for any span of time can be incredibly risky, and COBRA costs should be a topic of negotiation.
4. Where is the tail coverage?
There is a chance you will get sued after the termination of your employment for an incident that occurred while you were employed with the same organization. If your former employer did not offer you tail coverage in your contract, it is your responsibility to pay for this insurance. The cost of tail coverage will vary depending on specialty, however, many times, it is more valuable than a signing bonus and should be reviewed carefully as part of the compensation package.
5. Unrealistic incentives
Most employers use some variation of a production bonus structure to reward your productivity. Production bonus systems can be based on wRVUs, billings, or collections. There are pros and cons to each of these systems, however, ensuring the targets provided are attainable and fair is important in any negotiation.
6. Termination language is unclear
Every contract will feature a termination section that will spell out potential causes for the termination of your employment. This section should not be so extensive as to overwhelm you with what might get you fired but should provide a realistic view of the reasonable causes. This sets a clear expectation for how you should practice within the organization’s framework and, in the event of your termination, may be useful in filing a wrongful termination suit. The contract should provide termination procedures for both parties to be equitable.
7. Indemnification clauses
An indemnification clause is an agreement where you pay for losses incurred by another party, in this case, the organization you’re employed with, due to your negligent actions. For example, if a patient files a medical malpractice suit against you and alleges vicarious liability against your organization and you have signed an indemnification clause, you will have to cover all of the costs associated with court proceedings and even pay the damages. Try to negotiate your way out of a one-sided indemnification clause so that the hospital is also financially responsible in this scenario.
8. Extensive gag rules
Gag rules come into play when the organization you are employed with needs to prohibit you from presenting any information or evidence that would condemn the organization or its employees. These rules can be fair to a certain point, but when applied too broadly, may leave physicians without the ability to support the plaintiff case in the event the organization actually did do something wrong. Clearly, this raises ethical concerns and you should negotiate fair language when presented with this restriction.
The bottom line
Whether you are negotiating your first employment contract or your 10th, it is important to read the fine print of the contract and seek expert legal advice if any part of it is unclear. It is always better to be safe than sorry.