New land mines in your next (and even current) employment contract


Physician employment contracts include some new dangers. This includes physicians taking a new job, but it also includes already-employed doctors who are being asked to resign a new contract that contains new conditions. A number of these new clauses have arisen because of COVID-19. When the pandemic dramatically reduced patient flow, many employers didn’t have enough money to pay doctors and didn’t always have physicians in the right location or practice setting.

Vowing this would never happen again, some employers have rewritten their physician contracts to make it easier to reassign and terminate physicians.

Here are 12 potential land mines in a physician employment contract, some of which were added as a result of the pandemic.

You could be immediately terminated without notice

One outcome of the pandemic is the growing use of “force majeure” clauses, which give the employer the right to reduce your compensation or even terminate you due to a natural disaster, which could include COVID.

“COVID made employers aware of the potential impact of disasters on their operations,” said Dan Shay, a health law attorney at Alice Gosfield & Associates in Philadelphia. “Therefore, even as the threat of COVID abates in many places, employers are continuing to put this provision in the contract.”

What can you do? “One way to get some protection is to rule out a termination without cause in the first year,” said Michael A. Cassidy, a physician contract attorney at Tucker Arensberg in Pittsburgh.

The force majeure clause is less likely to affect salary, but could impact bonus and incentive tied to performance. It’s wise to try to specifically limit how much the force majeure could reduce pay tied to performance, and to be prepared to negotiate that aspect of your contract.

No protections if you’re let go through no fault of your own

You could lose your job if your employer could not generate enough business and has to let some doctors go. This happened quite often in the early days of the COVID pandemic.

In these situations, the doctor has not done anything wrong to prompt the termination, but the restrictive covenant may still apply, meaning that the doctor would have to leave the area to find work.

What can you do? You’re in a good position to get this changed, said Christopher L. Nuland, a solo physician contract attorney in Jacksonville, Fla. “Many employers recognize that it would be draconian to require a restrictive covenant in this case, and they will agree to modify this provision.”

Similarly, the employer may not cover your tail insurance even if you were let go from your work through no fault of your own. Most malpractice policies for employer physicians require buying an extra policy, called a tail, if you leave. In some cases, the employer won’t provide a tail and will make the departing doctor buy it.

In these cases, “try for a compromise, such as stipulating that the party that caused the termination should pay for the tail,” Mr. Nuland said. “The employer may not agree to anything more than that because they want to set up a disincentive against you leaving.”


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