Negotiating Physician Contracts

Although many employees do not have a formal employment contract, physicians often have detailed agreements governing the rights and responsibility of the employee and employer.  This is because physicians are highly-trained individuals and this employee-employer relationship needs to be detailed at length in writing.  Although physician contracts are oftentimes long and detailed, there are several considerations people should keep in mind when negotiating physician contracts.

Moonlighting

Part-time work (also called “moonlighting”) for other employers is an important consideration when negotiating physician contracts.  It is common for physicians to work night shifts and pursue other pursuits outside of their main job.  However, employers have different policies when it comes to moonlighting.  Some medical employers expressly forbid moonlighting and require physicians to only use their medical skill for that employer.  Other medical employers allow moonlighting, but only with the written consent of the employer.  In addition, other employers allow physicians to moonlight.  Usually, the higher-paid positions are the ones that do not permit moonlighting, since the employer is presumably paying a premium so that the physician will only work for that employer.  In any case, individuals negotiating physician contracts should carefully evaluate whether they would like to moonlight and how they should approach part-time work with their main employer.

Non—Compete

Another discussion point when negotiating physician contracts is non-compete provisions in agreements between the physician and their employer.  Many medical employers do not wish for physicians to work for a competitor in their area for a certain period of time after they leave their employment.  This is oftentimes because employers spend considerable resources training physicians, and they do not wish their competitors to benefit from this training for a period of time.

In many jurisdictions, so long as the duration and geographic scope of non-compete agreements are reasonable the provision will be enforced.  It is not uncommon in the New York City and New Jersey area for physician non-competes to stay in place for a year or slightly longer after a physician leaves their job and to impact a radius of five to ten miles from where the employer has offices.  However, ten miles is different in rural areas than in urban areas, which may encompass most of a city in which a physician hopes to work.  As a result, physicians should try and limit the scope of non-competes or eliminate them altogether if this is possible, to ensure that they have the most flexibility if and when they leave their jobs.

Termination Without Case

Provisions about termination without cause are often discussed when negotiating physician contracts.  Normally, in non-medical industries, workers are classified as “employees at will,” which basically means that either the employer or the employee can termination the relationship for many reasons so long as it does not violate a law or public policy.  However, since physicians normally have more bargaining power when negotiating with employers, many contracts specify that they can only be terminated with cause.  Sufficient cause to terminate a physician usually involves a breach of ethics, criminal activity, and other similar conduct.  If a physician contract also includes a faculty appointment, it is even more important to only have a termination with cause provision so that the employment arrangement is similar to the tenure that is commonplace among professors.  Job security is an important benefit, so it is important to carefully evaluate language that may empower an employer to terminate a physician without cause.

Malpractice Insurance

Malpractice insurance is another important topic for discussion when negotiating physician contracts.  Physicians should have malpractice insurance that protects the physician if anyone files a lawsuit against them related to their practice of medicine.  Malpractice insurance can be expensive for physicians, depending on the specialty, their experience, and a number of other factors.  For this reason, many employers agree to procure malpractice insurance for physicians who work for them.  This helps them negotiate a lower rate and ensure that the employer is also covered by the policy.  However, physicians should be apprised of the limits of malpractice insurance that is procured for them to ensure that there is sufficient coverage should any issues arise.

Other Documents

It is important to understand when negotiating physician contracts that other documents govern the employer-employee relationship.  Many contracts between physicians and their employers specify that an employee handbook also governs the relationship between employee and employer.  Moreover, physician contracts may also refer to separate float policies, teaching policies, and other writings that are not expressly conveyed in such contracts.  In addition, physician contracts may discuss separate forms that physicians need to fill out in order to be hired and materials that they must furnish to finalize their employment.  This may include passing a background check, furnishing proof that the physician is licensed to practice medicine, and other related matters.  It is important when negotiating physician contracts that all relevant documents and policies are reviewed, and that the physician understands all of the information and documents they need to provide in order to finalize their employment.

The Rothman Law Firm is experienced with negotiating physician contracts throughout New York and New Jersey involving a variety of different hospital systems and other employers.  If you are looking for a skilled contracts attorney to review a physician contract or handle another legal issue, please feel free to contact The Rothman Law Firm to request a free consultation.