Career and Life Planning Guidebook for Medical Residents

Termination Rights: As mentioned, a contract may expire after a certain period of time or upon a certain date. An employment agreement will also address circumstances which will allow either the employer or the physician to terminate the agreement prior to the end of a term. While it may not initially be offered, you should consider negotiating the right to terminate the contract for “good reason” or ‘cause’. Examples of “cause” would be the employer’s breach of the agreement, relocating the physician’s practice outside of an agreed upon distance, reduction in responsibilities or scope of practice, additional compensation opportunities, harassment by superiors, etc. Termination “without cause” is basically resigning for any other reason that is not specified in the agreement. A physician terminating the contract without “good reason” may forfeit certain contract benefits such as tail insurance coverage (if applicable) and should expect strong enforcement of post-employment covenants as discussed in the remainder of this chapter. Likewise, employerswill include the right to terminate you “for cause” and define cause to include your breach of the agreement for such reasons as failure to achieve and maintain board certification, failure to maintain timely and accurate medical records, loss of license, or professional misconduct. The definition of “cause” and the rights and obligations of the parties must be carefully considered when reviewing an agreement. It is in the physician’s interest for “cause” to be defined objectively and not subjectively. It can be very difficult and expensive for a physician to prove that a termination “for cause” was unjustified when the contract permitted the employer to terminate for causebasedon “conduct detrimental to theemployer and determined in its sole discretion”. Finally, death, disability, or the group’s loss of a contract with a hospital may be included among the definitions of termination for cause and you must be aware of the consequences of such terminations. You should not be subject to loss of benefits or the imposition of financial obligations for conditions clearly beyond your control. Financial Obligations upon Termination: Certainly the time to negotiate financial provisions related to a termination of the agreement is before you enter into the agreement. As previously mentioned, if you are terminated “for cause” you may still be permitted to purchase tail insurance coverage, but the employer’s obligation to pay this significant expense would fall away. In general, it is reasonable for the physician to enjoy all rights to compensation and benefits provided under the agreement if the contract terminates at the end of its stated term, if the physician terminates the contract for good reason, or the employer terminates the contract without cause. When terminated “for cause” or resigning without good reason, the physician will not receive certain compensation and benefits and may be subject to additional obligations Employment Law For Physicians 319 WWW.PHYSICIANCAREERPLANNING.COM