But You Signed a Contract…

For most of us, when we are offered a position, we are so excited and enthusiastic and raring to go that we are not thinking to the future day when we will be ready to say au revoir and set off for greener pastures. This is when the real problems can begin if you have signed a Faustian bargain, often times referred to as an employment contract.

First of all, as Steve Covey famously said,

Begin with the end in mind.

Think about applying such a philosophy to the day you will quit, before you literally sign on.

I have written elsewhere about my experience with contracts, which has primarily been in the context of clinical practices and hospital employment. Many of the things I have seen generalize to most any discipline (but keep in mind that the following is not a substitute for legal advice).

Actually Read the Contract

While this may seem silly to state, I worked with one fellow who told me that he made his contracts so one-sided that if a potential hire signed it without negotiating or at least questioning the more arduous parts, that he considered rescinding his offer as the candidate must be either too na?ve to understand what was written or too lazy to have read the contract in the first place. (I always thought that approach said a bit more about him rather than the new hire.) But the point is, do read the contract.

A New Language

I felt pretty dumb when I read my first contract because of the language. Here are a few of the basics to help get you going:

“Term”: This is the duration of your employment or consultancy. Most states allow employers to fire an employee for any reason ("at will") unless a civil right or discrimination law applies. However, if your contract specifies a term, you may be entitled to the balance of your compensation even if you are terminated without cause.

“Duties”: It is a good idea to specify what your duties will be to make certain that they are within your state’s licensure/practice requirements if you are in a medical or clinical position.

“Compensation”: There are many aspects of compensation, such as salary, benefits, paid vacation and other perks (e.g., parking, printing, Wi-Fi, mobile phone, computer, secretarial support, malpractice insurance premiums, etc.). Make sure the specifics are articulated.

Also, is your employment “exclusive” or can you (on our own time) do on-call for other hospitals or practices? Can you moonlight or consult? I worked in one hospital where you pretty much had to bring in any of your private patients into the hospital’s outpatient practice. You could not maintain a separate private practice, but you were free to be on faculty wherever and teach as you wished, or any book royalties you may get from your publications were yours to keep. At another hospital across town, it was just the opposite. So be sure to be clear at the get-go. If your employment is exclusive, how is the exclusivity limited? This will be even more important when leaving (see below). This can apply to other professions as well if you want to freelance in your off-hours. Some contracts will attempt to limit or prohibit this, so do be on the lookout if this is important to you.

“Pay Increases”: Ask whether there is a formula for pay increases if it is not included in the contract. For example, in clinical employment, ask whether you'll be paid more when you obtain your Board Certification. What about when your caseload reaches a certain number of patients, or you start doing inpatient work or more specialized procedures?

Clarify…

…anything you do not understand. The clarification can come from a well-spent hour with an employment attorney. He or she can advise you as to what is usual and customary as well as explaining any verbiage that is unclear to you. Or if you intellectually understand what is stated in the contract but feel it is not something you are comfortable with, then you can seek clarification from the potential employer before you join to be sure you are both clear and comfortable.

Negotiate

Depending upon your situation as well as the employer, you may have the opportunity to negotiate areas of the contract that would enhance your perspective of the position while perhaps being inconsequential to the employer. If negotiation in your situation is not an option, then you may want to consider other offers.

High-Risk Areas to Consider When Leaving

The aforementioned areas are all done when you and your employer were in your honeymoon phase of your (potential) employment. Now it is time to say goodbye and here are some contractual areas to consider:

Non-Compete Clause

This can be a big problem when you leave. You may have built up a great practice, and now you may want to venture out on your own. But your employer may remind you that you cannot “take” any of your patients with you when you leave to start your private practice or join another group. Of course, referral sources can refer to whomever they trust, and patients have free will and the right to be under the care of whomever they please. But your former employer may see it as patient-stealing or referral poaching.

Be discreet when dealing with the referral sources you meet while you are working for your contracted employer. Avoid saying or doing anything that will lead your employer to think that you are siphoning referrals to yourself that should have gone to the practice instead.

The good news is that some states limit non-compete language, and I have heard (but never tested) that many judges do not like such cases to be adjudicated and have a propensity to side with the former employee. Nevertheless, going through avoidable litigation — and its concomitant costs, time loss, hassles, and anxieties — is not something you would want to do. So see if the contract limits non-competes by geography (e.g., you may not work within a 50-mile radius of the primary site), or by time (e.g., you may not work in the area for six months immediately following departure), or by activity (e.g., you may not do certain procedures or work with certain types of patients). Again, the time to negotiate is before you are hired, not when you are about to leave or have already left.

Being Terminated

You may find yourself in a position of being terminated. If it is due to something about the quality of your work, your contract may have what is called a “cure period” specified so that if a problem arises about your work, you are given time to resolve the problem.

Also, be on the lookout for “change of control or ownership” language. For example, if the practice (or company or startup) you work for merges or is bought by another organization, would you be let go or retained? (See severance rights below.) If your contract is renewable (that is, not ongoing) try to include wording to provide ample notice (six weeks) if your contract is not going to be renewed so you can have time to find a new gig before you are finished from the ending one.

Severance Rights

Articulate terms of your severance rights if there is a change in management or ownership. For instance, I have seen language asking for full payment of your contracted salary if you are terminated without cause or if your employer breaches the contract or if the practice is acquired.

Once You Leave, Really Be Gone

I had a student who was thrilled to gain a predoctoral internship at a practice where they printed business cards for her, added her name to the door, and gave her a voicemail box in the practice’s system. This was all fine; she progressed and completed her internship, and went on with her work in her professional career. Then, out of the blue, she found she was a party to a medical malpractice suit brought forth against the practice from a patient she had never treated. In fact, the complainant was not seen in the practice while the former intern was there. But her name was still on the door, remaining business cards with her name lingered in the waiting room holder, and a call made to the office by the disgruntled patient’s attorney listed all of those in the practice in the outgoing message — still including the former intern.

The good news was that the former intern was able to explain and prove why she should not be a party to the suit, but she nevertheless had to spend a lot of time, her own attorney fees, and go through some pretty scary moments in order to unscrew an avoidable event. So, when you do leave, formally request, as would be appropriate, that any remnants of your time there be removed within a reasonable time (and yes, do double-check that it was done).

Strong fences do make for good neighbors, and clearly understood and mutually agreed upon contracts can make employment transitions both in and out of positions as smooth and risk-free as possible.

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If you'd like to learn more or connect, please do at https://DrChrisStout.com. You can follow me on LinkedIn, or find my Tweets as well.

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