Employment Contract Issues for Medical Professionals

While most employees in the United States are “at will,” most employment relationships in the medical field — especially for physicians — are governed by an employment contract. These contracts vary by employer, location, and specialty, but there are several types of provisions that are common to almost all medical employment contracts. Below are a few of the most important terms that you should be aware of before signing an employment contract in the medical field. Contact a Maryland employment attorney today to discuss the specifics of your situation.

Productivity

Productivity is a measure of a physician’s work output or efficiency. It is measured according to different criteria and often directly impacts the physician’s compensation. The most common type of production bonus is the 50% model, in which physicians are allowed to keep 50% of their production based on either billing or collections. Other production bonus measures are based on relative value units (RVUs) such as positive outcomes, patient satisfaction, and participation in group governance. Make sure you understand how your new employer measures productivity and how much of an effect it will have on your compensation.

Compensation

While part of your compensation will be based on your productivity, you may also receive a base salary and bonuses. If you are a relatively new physician, you likely will not have much bargaining power over your salary, especially if standard salaries are set by corporate boards. More advanced or specialized physicians may have more bargaining power, and both new and experienced physicians should attempt to negotiate other benefits terms, such as paid time off, health insurance, and 401(k) contributions.

Term

The term of a contract is the period of time that it will be in force — usually a number of years. Some employment contracts renew automatically, while others require renegotiation. If your employment contract renews automatically, you should ensure that the renewal provision contains a corresponding salary increase.

Hours, Duties, and Location

The hours, duties, and location provisions of an employment contract cover the employee’s day-to-day working conditions, including what hours they are expected to be on call, which specific duties they are expected to perform, and where they will be expected to work. Before signing a contract, make sure that your working hours are manageable and that you understand the scope of your duties. You also may be required to travel between several working locations, so make sure that you will have the time to do so.

Termination

Unlike at-will employees, contractual employees may be fired only for “cause.” Typical examples of occurrences that could lead to termination for cause include losing your medical license, conviction of a crime, and incompetence. Your contract may also allow either you or your employer to unilaterally terminate the contract without cause upon giving sufficient advanced notice to the other party. Speak to a Maryland employment attorney if you believe you’ve been improperly terminated.

Non-Compete Agreements

A non-compete agreement (or clause) states that, upon termination, the former employee is prohibited from working within a certain distance of the former employer for a certain amount of time. Although these types of agreements generally are disfavored by courts as restraints on free trade, they are valid and enforceable so long as their terms are reasonable — especially against highly skilled professionals like physicians. If your contract contains a non-compete clause, assume that your employer will attempt to use it against you when you leave.

Need Help? Contact a Maryland Employment Attorney

Before signing an employment contract, it would be in your best interest to have it reviewed by an experienced attorney. To get started, please contact a Maryland employment attorney at the Law Firm of J.W. Stafford for a consultation by calling 410-514-6099.

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