By: Michelle Caputi
Ending a physician employment agreement is a significant decision that requires careful planning and attention to detail. Whether you’re moving on to a new opportunity, stepping away from clinical practice, or simply seeking a better fit, the way you handle your termination can have lasting effects on your career, reputation, and relationships within the medical community.
Step 1: Review the Termination Provisions
The first step in terminating your physician employment agreement is to carefully review the termination provisions in your contract. These provisions outline the rules and requirements for ending the agreement, including:
· Termination for Cause vs. Without Cause: Most physician contracts allow for termination either “for cause” or “without cause.” Terminating for cause typically involves specific reasons outlined in the contract, such as misconduct or breach of duties. However, this can have serious implications for your future employment and references. Terminating without cause is often the safer route, but it’s important to consult with a healthcare attorney to determine the best approach for your situation.
· Notice Period: Many contracts require a specific notice period before termination. This could range from 30 to 120 days or more. Failing to provide proper notice could result in financial penalties or legal disputes.
Step 2: Understand the Notice Requirements
Once you’ve reviewed the termination provisions, it’s time to focus on the notice requirements. Pay close attention to:
· How to Provide Notice: Your contract may specify how notice must be given—whether it’s in writing, via certified mail, or through another method. Following these instructions to the letter is critical to ensure your termination is valid.
· Timing: Make sure you provide notice within the required timeframe. If you’re planning to terminate without cause, giving ample notice can help maintain goodwill and ensure a smoother transition.
Step 3: Check for Non-Compete Provisions
Non-compete provisions, also known as restrictive covenants, are common in physician employment agreements. These clauses may limit your ability to practice within a certain
geographic area or timeframe after leaving your current employer. Before terminating your agreement, review the non-compete language carefully to understand:
· Scope and Duration: How far does the restriction extend, and for how long? Are there exceptions for certain types of practice or locations?
· Enforceability: Non-compete clauses are subject to state laws, and their enforceability can vary widely. A healthcare attorney can help you assess whether your non-compete is likely to hold up in court.
Step 4: Evaluate Tail Coverage
Tail coverage is a critical consideration when terminating a physician employment agreement. This type of insurance provides protection against malpractice claims that arise after you leave your employer but are related to incidents that occurred during your employment. Key questions to ask include:
· Who Pays for Tail Coverage? Some contracts require the employer to cover the cost, while others place the responsibility on the physician.
· What Are the Costs? Tail coverage can be expensive, so it’s important to budget for this expense if you’re responsible for it.
Step 5: Review Indemnification Language
Indemnification clauses outline how liability is handled during your employment. Before terminating your agreement, review this language to understand:
· Your Coverage: Were you adequately protected during the course of your employment? Are there any lingering liabilities you need to address?
· Post-Termination Obligations: Does the indemnification clause impose any obligations on you after you leave?
Step 6: Consider the Impact of Termination
Terminating your employment agreement is not just a legal and financial decision—it’s also a professional and relational one. Consider the following:
· Future Employment and References: Terminating for cause can raise red flags for future employers and may impact your ability to secure positive references. Whenever possible, lean toward terminating without cause to preserve your professional reputation.
· Community Relationships: Maintaining positive relationships with facilities, medical staff, and colleagues is essential, especially if you plan to continue practicing in the same area. A respectful and professional approach to termination can go a long way in preserving these connections.
Step 7: Consult with a Healthcare Attorney
Terminating a physician employment agreement is a complex process with significant legal and professional implications. Consulting with a healthcare attorney can help you:
· Understand your rights and obligations under the contract.
· Navigate the termination process smoothly and avoid potential disputes.
· Protect your career, reputation, and financial interests.
Ending a physician employment agreement is never a decision to take lightly, but with careful planning and the right guidance, it can be a positive step forward in your career. By reviewing your contract, understanding your obligations, and seeking legal advice, you can ensure a smooth transition and set yourself up for success in your next chapter.
