Medicine is a unique profession; a life and death calling for many doctors, but for most also a hard-nosed business with little margin for error. Physician contracts reflect the profession’s special status, and the conflicting pressures on employers who want to attract and keep top talent, but also want to pay as little, and retain as much termination autonomy as possible. Especially for younger doctors about to take their first real job, understanding and navigating contractual intricacies can pose a daunting challenge. The following are some common pitfalls to keep in mind.
How long will the job last?
Many doctors assume that a contract with a specified duration, or “term,” means they have a job for the length of the term. Beware the details, however. If the contract contains an “at-will” clause, or a provision that allows the employer to terminate without any reason after giving notice, the job guarantee is most likely totally illusory, and no longer than the specified notice period. The “term” effectively means only that so long as the doctor continues to work for the employer during the term period, the contract will govern his or her compensation and benefits. So, buying a house based on the assumption a job will last two or three years (or whatever the term might be) might not be the wisest decision.
What are the employment rules and benefits?
Oftentimes a contract doesn’t spell out specific workplace rules. Instead, the doctor simply agrees to conform to all rules and regulations the employer might adopt from time to time. Likewise, benefits like parenting leave may be specified in places other than the contract. Thus, a doctor might want review such extrinsic documents before signing on the bottom line, and might want to incorporate them explicitly into the contract.
Warnings and the right to cure minor problems?
Loss of a medical license or privileges at a hospital may make it impossible for a doctor to continue working, and termination for such issues should come as no surprise. What about failure to enter time into the employer’s system, however, or submitting expense reports a few days late? If a contract makes such minor infractions grounds for termination, the doctor should have a chance to fix, or “cure” the problem before losing his or her job.
Limitations on post-employment work?
Most physician contracts include provisions that limit what jobs a former doctor can take for some time (perhaps as much as two years) after leaving an employer. Similarly, a contract may prohibit a departing doctor from soliciting patients, or former colleagues. Such provisions warrant careful review to make sure they’re not too onerous. For example, a doctor terminated without any cause or alleged breach of a contract should not face the same non-compete limits as a doctor who resigns to seek a better-paying job.
Who pays for the tail?
Most contracts include some kind of malpractice insurance, but doctors should pay special attention to how it actually would work. If it’s on what’s called a “claims made” basis, it won’t cover a doctor for malpractice allegedly occurring while working for the employer if the claim is made after the doctor has moved on to a different job. That liability “tail” can follow a doctor for several years, typically until the statute of limitations has run on potential claims.
The foregoing questions are some of the major considerations a doctor should address before accepting a new job. Because the red flag contract provisions often appear in unexpected places within a contract, consultation with a lawyer before signing is always a prudent step.
