Five contract red flags every physician should know


Recruiting health care workers is a challenge these days for both private practice and hospital employers, and competition can be fierce. In order to be competitive, employers need to review the package they are offering potential candidates and understand that it’s more than just compensation and benefits that matter.

When all else is equal, contract language can end up being the difference between capturing or losing a candidate.

As someone who reviews physician contracts extensively, there are some common examples of language that may cause a candidate to choose a different position.

Probationary period

Although every employer wants to find out if they like the physician or midlevel employee that they have just hired before fully committing, the inclusion of a probationary period (usually 90 days) is offensive to a candidate, especially one with a choice of contracts.

Essentially, the employer is asking the employee to (potentially) relocate, go through the credentialing process, and turn down other potential offers, all for the possibility that they could easily be terminated. Probationary periods typically allow an employee to be immediately terminated without notice or cause, which can then leave them stranded without a paycheck (and with a new home and/or other recent commitments).

Moreover, contracts with probationary periods tend to terminate the employee without covering any tail costs or clarifying that the employer will not enforce restrictive provisions (even if unlikely to be legally enforceable based on the short relationship).

It is important to understand that the process of a person finding a new position, which includes interviewing, contract negotiation, and credentialing, can take up to 6 months. For this reason, probationary provisions create real job insecurity for a candidate.

Entering into a new affiliation is a leap of faith both for the employer and the employee. If the circumstances do not work out, the employer should fairly compensate the employee for the notice period and ask them not to return to work or otherwise allow them to keep working the notice period while they search for a new position.

Acceleration of notice

Another objectionable provision that employers like to include in their contracts is one which allows the employer to accelerate and immediately terminate an employee who has given proper notice.

The contract will contain a standard notice provision, but when the health care professional submits notice, their last date is suddenly accelerated, and they are released without further compensation, notice, or benefits. This type of provision is particularly offensive to health care employees who take the step of giving proper contractual notice and, similar to the probationary language, can create real job insecurity for an employee who suddenly loses their paycheck and has no new job to start.

Medical workers should be paid for the entire notice period whether or not they are allowed to work. Unfortunately, this type of provision is sometimes hidden in contracts and not noticed by employees, who tend to focus on the notice provision itself. I consider this provision to be a red flag about the employer when I review clients’ contracts.


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