What to Know Before Signing a Physician Employment Agreement

by Steven M. Harris, Esq. •

You have done the work, graduated, completed your training, and are ready to embark on the first chapter of your career. It’s important to analyze your employment agreement to ensure it meets your expectations.

Existence of Restrictive Covenants

Another critical point to clarify before executing an employment agreement is whether it includes any type of restrictive covenant. Restrictive covenants, which include noncompetition and nonsolicitation provisions, prohibit employees from working at certain places, with certain people, or in certain geographic areas after they leave their current place of employment. The laws addressing restrictive covenants vary by state.

If your employment agreement includes restrictive covenants, be sure you understand their scope—geographic and temporal—as well as the types of medicine you are prohibited from practicing. If the covenants seem too broad or unnecessarily restrictive, consult with an attorney. Overly broad or unduly burdensome covenants are often unenforceable.

Notice and Termination Provisions

When examining your employment agreement, review whether it contains any notice requirements, which may require you to notify your employer in advance of a departure. Also determine whether terminating an agreement early will result in a penalty or fine. Understanding in advance whether penalties are associated with prematurely terminating your agreement will allow you to later decide whether you want to cancel the agreement and pay the penalty or push back your timeline until the end of the agreement’s term to avoid any fees.

General Provisions to Analyze

Generally, you want to make sure that what was discussed during the hiring or negotiation stage is articulated carefully in the agreement. Examples of provisions that should be included are:

  • Duties of employment, including administrative tasks and responsibilities;
  • Your work schedule, including weekend, holiday, and on-call expectations;
  • Requirements for the maintenance of professional liability insurance; and
  • Employee benefits, including paid time off, insurance, retirement savings, and expense reimbursement.

You have done the work, graduated, completed your training, and are ready to embark on the first chapter of your career. It’s important to analyze your employment agreement to ensure it meets your expectations. If you have any questions about your agreement, contact an experienced healthcare attorney to help you with this analysis. 

Steven M. Harris, EsqSteven M. Harris, Esq., is a nationally recognized healthcare attorney and a member of the law firm McDonald Hopkins LLC. Contact him via email at sharris@mcdonaldhopkins.com.

Compensation Models

  • 100% salary: Physician receives a prenegotiated, fixed salary.
  • Salary plus incentive: Guarantees minimum base salary that can be supplemented based on merit.
  • Capitation/productivity plus capitation: Pays a provider a prenegotiated fixed amount for each patient enrolled.
  • Equal shares: Divides total amount practice earns among the physicians.
  • Pure productivity: Gives physicians a designated percentage of revenue they bring to the practice.