Medical Employment Contracts: Key Considerations for Medical Professionals

Medical employment contracts are among the most significant legal documents in a medical professional’s career. These agreements govern critical aspects of employment, from compensation to restrictive covenants, and can have lasting impacts on career trajectory and financial stability. Whether you’re a general doctor, surgeon, physician assistant, dentist, or other medical professional, understanding and negotiating the terms of your contract is crucial to protecting your interests and ensuring a fair working arrangement. Here’s what you need to know.

One of the first distinctions to consider is whether you will be classified as an employee or an independent contractor. This designation affects taxation, benefits, liability, and work flexibility.

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• Employee Status: Medical Professionals classified as employees typically receive a salary or hourly wage, along with benefits such as health insurance, retirement plans, and malpractice coverage. Employers also withhold taxes and handle payroll obligations.

• Independent Contractor Status: If working as an independent contractor, you are responsible for handling your own taxes, purchasing malpractice insurance, and securing benefits. However, this status often offers greater autonomy, allowing you to work for multiple entities and negotiate higher pay rates to compensate for the lack of benefits.

Understanding the implications of each status is crucial before signing an agreement.

A contract should provide a clear description of duties, including:

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• Clinical Responsibilities: Patient load, scheduling expectations, specialty-specific duties.

• Administrative Duties: Requirements for meetings, paperwork, and participation in hospital committees.

• Call Coverage: On-call expectations and compensation for extra coverage.

A vague or overly broad job description can lead to disputes. Ensure the expectations align with what was discussed during the hiring process.

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4. Benefits and Professional Development Support

In addition to salary, medical employment contracts should outline benefits such as:

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• Health, Dental, and Vision Insurance

• Retirement Plans (401(k), 403(b), or Pension Contributions)

• Malpractice Insurance (Occurrence vs. Claims-Made Policies)

• Paid Time Off (PTO) and Medical Leave

• Continuing Medical Education (CME) Allowance and Time Off

• Licensing and Board Certification Fees

Assess the adequacy of these benefits and compare them with industry standards.

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5. Restrictive Covenants: Non-Compete and Non-Solicitation Clauses

Many contracts include non-compete clauses that restrict where a medical professional can practice after leaving the employer. Key considerations include:

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• Geographic Scope: How far does the restriction extend? A broad radius could limit your ability to work locally.

• Duration: Non-compete clauses typically last 1-3 years but should be reasonable.

• Enforceability: State laws vary on non-competes, and recent regulatory shifts have led to challenges against overly restrictive clauses.

Non-solicitation clauses prevent medical professionals from recruiting patients or staff from their former employer. Carefully review the terms to avoid career limitations.

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6. Termination Provisions: Understanding Exit Strategies

Medical professionals should be aware of contract termination conditions, including:

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• Without Cause Termination: Many contracts allow either party to terminate the agreement with a notice period (typically 60-90 days).

• For Cause Termination: Includes termination for misconduct, failure to meet productivity benchmarks, or loss of licensure.

• Severance Pay and Notice Periods: Understand what financial or logistical obligations apply upon contract termination.

Having a clear exit strategy helps mitigate risk and ensures a smoother transition if you decide to leave.

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7. Dispute Resolution: Arbitration, Mediation, and Legal Rights

Dispute resolution clauses define how conflicts are handled. Common provisions include:

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• Arbitration: A private dispute resolution process that may limit legal recourse.

• Mediation: A voluntary process aimed at resolving disputes without litigation.

• Choice of Law and Venue: Specifies which state’s laws govern the contract and where disputes will be resolved.

Medical professionals should carefully evaluate these provisions to ensure fair dispute resolution procedures.

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Given the complexity of medical employment contracts, seeking legal counsel before signing is advisable. An attorney can:

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• Identify unfavorable terms and red flags.

• Clarify ambiguous language that could lead to future disputes.

• Negotiate the terms on your behalf.

• Ensure compliance with state and federal regulations.

A well-structured contract provides clarity, security, and long-term career benefits. Medical professionals who take the time to review and negotiate their agreements are better positioned for success.

At Glide Legal, our business attorneys can review your Medical Employment Agreement and provide recommendations and revisions tailored to your needs. Schedule a free consultation through our website to get started (Glide Legal - Contact Us).