How Do I Get Out of a Physician Contract?

After signing a physician contract, there may be a situation that requires the physician to get out of your contract. It could be because of difficulties within the job itself, with the prospective employer or having personal problems that are unavoidable. No matter the reason, it is important for a physician to understand the legalities of terminating employment and how that fits in with his or her signed contract.

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A Right to Terminate

Standard contracts have clauses that require a 90-day notice from either the physician or his employer when one or the other wants to end the contract. Sometimes the notice period is 180 days but the time frame seldom goes above that. This will occur when it is difficult to fill the position. However, regardless of the time period delineated on the contract, sometimes a physician has a need to terminate early.

Many times when a physician is going to leave a position before the notice period ends, the business may just be understanding and work out an agreeable plan, particularly when it is a family emergency or the like. However, if the physician wants to leave early because of a better job offer, this can create problems in the exiting. This could be considered a breach of contract.

Right to Terminate Clause

Besides a notice period laid out in a contract, it should have a Right to Terminate clause. The term for this is called termination for cause and means that one or the other (employee or employer) did not uphold the terms of the contract. A physician has to ensure they have all the right wording in a contract so this is fully covered. An attorney can help with a contract review to ensure it is included properly.

How to Avoid Problems

The best way to avoid problems on any dismissal of contract is to ensure a contract is reviewed with this in mind, before signing. The physician himself can review it, but it is best to have a contract attorney look it over and fix any points that aren’t clear, or negotiate changes in the contract so it is clear and aboveboard.

Failing to Hire a Lawyer with Specific Knowledge of Medical Employment Agreements

Failing to hire a contract lawyer with specific knowledge of physician employment agreements can result in problems. When a physician hires an experienced lawyer, the physician will avoid many pitfalls that can have long-lasting effect on your professional and personal life.

Understanding Employment Contracts for Physicians

Hiring entities seem to be moving towards taking an employment agreement and standardizing them, trying to simplify matters. However, there is still an opening to negotiate agreement terms. In fact, it is important that a physician does, as the physician will want the agreement to cover the important points and not be open to any interpretation. This is one reason an agreement lawyer is so important in the review process of employment agreements. Unfair or ambiguous points of an agreement can be addressed and handled.

Pitfalls to Watch For in a Medical Employment Agreement

Physicians should be careful about the employment agreement language. It can be vague or favorable to the employer and not the employee. It can show up anywhere but is particularly difficult when it comes to the schedule and duties. When a physician see the words “… will be determined by the practice…” it is time to be wary.

Bonuses and compensation based on productivity are another area to review carefully. Any payment of bonuses and incentives should be paid through the time of dismissal rather than a specific date. The wording here is crucial. The benefit start date also should be carefully reviewed or the physician could get stuck paying COBRA premiums himself until the start date in the agreement of the new employer.

Restrictive non-compete clauses must be reviewed so it doesn’t keep a physician from working for other specific competitors. These clauses also should be reviewed so the physician won’t be restricted from areas near where he now lives.

Failing to Hire Lawyers to Review Physician Employment Agreements?

Attorneys will be able to effectively review a agreement, making sure anything vague or which is an overreach is modified and made clear and reasonable. All the agreement terms need to have reasonable boundaries, and an agreement lawyer can ensure this occurs.

Agreeing to Unfair Termination Rules

Agreeing to Unfair Termination Rules is necessary to avoid when signing an employment contract, it is very important that the physician understands the laws of dismissal so the physician does not agree to things that can harm the physician later. If  the physician ends up being terminated from a job unfairly, it can be quite a fight to get justice.  Thus, Agreeing to Unfair Termination Rules in a contract are vital to avoiding conflict in the future.

What is Wrongful Termination?

Wrongful dismissal laws are something that refers to getting fired from a job for an illegal reason. It could be an employer who fires the employee because that person was complaining about safety concerns or discrimination, or it could be an employer who fires an employee because the employee was exercising a legal right. If an employer is discriminating against an employee and firing him or her because of disability, race, color, religion or the like, this is wrongful termination.

Wrongful Termination Law for Medical Providers

If someone is wrongfully terminated, they can file a lawsuit. Wrongful dismissal laws allow for damages in some cases for employees. But first they would need to win the suit. If there is a contract which delineates the law about unfair dismissal, this can only help the case.

Breach of the Agreement

It depends on the contact as to whether damages would be available. The contract can also outline the specific time in which a person can pursue damages in a case. Again, having a contract that outlines all the laws of wrongful dismissal will benefit the physician if they ever run into this situation with a job. You want a contract to be specific so that you are well-protected against anything occurring that ends in your dismissal.  For instance, issues with locums tenens assignments, surgery schedules, select income disputes, practice transitions (like in psychiatry, pediatrics, orthopedic medicine, hospitalist), PA supervision, post employment relationship issues, insurance, etc.

Breaking a Physician Contract with a Non Compete

Physicians with non compete clauses in their contract were originally considered as restraints of trade, and thus were invalid on the grounds of public policy at common law; however, many restraints of trade incident to contracts were upheld based on the rule of reason.  Thus, restrictive covenants between a physician not to compete after termination of employment are generally enforceable as long as it is reasonable.

However, there are a few states which prohibit non compete clauses.  Please review your state laws for non compete rules and regulations to see what the specific rules for your state are.  The general test for reasonableness of these clauses hold that on termination of employment, a covenant  which restrains an employee from competing with his former employer is termed reasonable if:

  • The restraint is not more than required for protecting the employer,
  • It does not inflict any untold of hardships to the employer, and
  • The restraint is not injurious to the public.

Reviews of Non Compete Reasonableness

For instance, in Ohio, a non-competition clause was considered unreasonable after judicial review when it was noted that a provider’s sub-specialty was uncommon, and that it would be harsh if the restrictive covenant was enforced as the hospital where he was precluded from practicing was only one of the few institutions in the area where he could practice his specialty.

Thus, in Ohio, covenants restraining providers from competing with his employer on termination of employment is considered unreasonable if it inflicts hardship on the physician’s ability to practice, is injurious to the public, if the demand for the physician’s medical expertise is important for the community people and if the physician’s services are important for the health, care and treatment of public.  However, non-competition clauses for physicians, in general, are enforceable as long as they protect some of the  prospective employer’s legitimate interests.  Having a non-compete review by a lawyer can assist in avoiding legal issues.

Physician Contract Review Lawyer

When physician contracts are reviewed by an experienced attorney, you will find financial benefits which end up outweighing the cost of the review. Leave it to the experts. If you are in need of a review of an employment agreement or contract analysis schedule a Physician Contract Review with Chelle Law today!