By Christopher E. Brown, J.D., The Health Law Firm, and George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law
This blog is the seventh in a series intended to provide a review of the basics of contracting for physicians and health professionals, primarily by discussing employment agreements. We will highlight many of the common provisions found in employment contracts, along with many of the mistakes and pitfalls that we see in our day-to-day practice.
By the end of the series it is our hope that physicians, nurse practitioners and other health professionals will understand the common language and terms found in employment contracts for professionals so they can recognize mistakes commonly made when negotiating them. We hope to help make both employers and employees more knowledgeable about employment contracts so they can avoid potential problem areas and legal entanglements.
Our comments here are meant to provide general rules we have learned from our experience. However, please remember, every situation is different and there are exceptions to every rule.
Tip 16 - Determine How Outside Employment and Compensation is Handled.
If outside employment is allowed, it’s imperative you know who is entitled to the income. Some employers prohibit outside employment, while others allow it but require that the income be turned over to the employer. If the physician anticipates “moonlighting,” the physician should negotiate to minimize the employer’s control over outside employment and income from it. If the physician expects to be involved in significant volunteer activities working as a physician, the contract should say whether the employer has the right to approve or reject such volunteer activities.
Tip 17 - Pay Close Attention to the Termination Clause.
This is the single most important clause of a contract because it can dash the expectations of one or both parties. Close attention should be paid to the terms and the conditions.
The termination section usually allows the employer to immediately terminate the physician’s employment if certain events occur, such as the physician losing his or her medical license, being convicted of a felony or dying. Many contracts also permit immediate termination if the employee’s license is restricted, if privileges are significantly restricted, or if the employee becomes disabled.
Almost all contracts also permit early termination by either party by simply giving notice. While the notice periods range from 30 to 180 days, most physician employment agreements permit either party to terminate the agreement with 60 to 90 days notice. This type of term essentially leaves the physician with a contract which lasts only for the stated notice period.
Past and Future Blogs on Employment Contracting.
To review our previous blogs on physician contracting tips: click here for part one, click here for part two, here for part three, here for part four, click here for part five and click here for part six.
In our future blogs, we will continue to provide tips on various issues to watch for in health care employment contracts.
Contact a Health Care Attorney Experienced in Negotiating and Evaluating Physician and Health Professional’s Business Transactions.
At the Health Law Firm we provide legal services for all health care providers and professionals. This includes physicians, nurses, dentists, psychologists, psychiatrists, mental health counselors, durable medical equipment suppliers (DME), medical students and interns, hospitals, ambulatory surgical centers, pain management clinics, nursing homes, and any other health care provider.
The services we provide include reviewing and negotiating contracts, preparing contracts, helping employers and employees enforce contracts, advice on setting aside or voiding contracts, litigation of contracts (in start or federal court), business transactions, professional license defense, opinion letters, representation in investigations, fair hearing defense, representation in peer review and clinical privileges hearings, litigation of restrictive covenant (covenants not to compete), Medicare and Medicaid audits, commercial litigation, and administrative hearings.
To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.
As a physician, do you have any questions about contracts? Tell us your mistakes or triumphs in negotiating your contract below.
About the Authors: Christopher E. Brown, J.D., is an attorney with The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.
George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.
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