What to consider before signing an employment contract

February 18, 2016
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You got a job? Congratulations!

We know you negotiated effectively for the best benefits package. The next challenge is to make sure that your employment contract accurately reflects the terms that you’ve negotiated and protects you from any unfortunate situations down the road. We hope you won’t have to rely on the contract, but if you do, don’t worry – we’ve got your back! Here are some things you should consider before you sign.

  1. Make sure a commencement date is included in the contract. This could affect you in two different ways:
    • Will you be ready to start on the agreed upon date? Will you have a license by then? You’re signing a legal document, and if you’re not ready to start by the date indicated in the contract, there could be some hefty penalties to pay.
    • Sometimes employers will tell you that they would like you to start on a certain date, and then when it gets closer to that time, no position is available at that particular location. Perhaps the location isn’t as busy as they thought it would be, or the doctor who was working there hasn’t left yet. In either case, you might find yourself working at another office owned by that employer until the position you desired becomes available. And now you’re commuting! So make sure that the commencement date is particular to a specific office location and position.
  2. Check the termination clause. Read carefully. Many employment contracts carry a financial penalty if you terminate without complying with the agreed upon termination clause, so you need to know the terms of that clause.
  3. You worked hard on negotiating your benefits package, so now we want to make sure you actually receive those benefits! All current benefits, (sign-on bonus, continuing education expenses, etc.), as well as any future benefits for which you will become eligible over time, should be listed in the contract.
  4. Your contract will probably include a restrictive covenant. We expect that the doctor who is hiring you is not going to want to risk that you will leave, open an office next door and take all the patients. But before you agree to the restrictive covenant, look at a map! Is the radius of the restrictive covenant unrealistic? Will it prohibit you from practicing in the neighborhood you desire? And what time period is included? Maybe you can commute for a year or two, but do you want to commute for the remainder of your career? The restrictive covenant should protect your employer, but should also be reasonable for you.
  5. We’re all accustomed to HIPAA and protecting patients’ personal information. Now, you must also deal with another type of confidentiality. Most employers will not permit you to use or disseminate any information developed within that practice (i.e. any and all trade secrets or products that were developed by the employer). So learn what you can, but don’t plan on taking it with you when you go. By the same token, any and all information contained within the electronic health records is the property of the practice, and does not belong to you. We want you to learn to create lasting relationships with your patients, but please be aware that you cannot take patient information (or the patients!) with you if you leave. These conditions will most likely be included in your employment contract.
  6. What are the terms of your contract renewal? While you might think that a longer employment term is most favorable, in this case, less is more. It’s to your benefit to have a contract that renews annually. That way, if you’re still enjoying that job, you will have an opportunity to renegotiate your benefits and salary one year from now. And if you aren’t, you will have an opportunity to terminate the contract after just one year.
  7. As opposed to contract renewal terms, when it comes to compensation, more is more, and we want to make sure you get your fair share! Your employment contract should clearly state your salary, as well as how you’re being paid – are you receiving a draw, collection or production? Will you be paid weekly? Monthly? Is there a guarantee? All of these details should be included in your contract.

Of course, you should have an attorney review your contract before you sign it. But you can save yourself some money and angst by making sure that the terms of the contract are agreeable to you before you pass it on to your attorney. And just in case you’re still not sure you need a written contract, realize that, as Samuel Goldwyn said, “A verbal contract isn’t worth the paper it’s written on.”

We’ll get you connected.