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New York and New Jersey Physician Employment Contracts: Top 10 Things for Doctors to Know Before Signing, Part II

above-the-bar-logo-no12.jpgBelow is a continuation of our previous Blog providing some general guidelines for doctors and medical professionals to consider when evaluating a physician employment agreement:

4) Restrictive Covenants. A non-compete clause will bar you from practicing medicine in a specified area for a certain period of time. In the event you leave or are terminated, the non-compete clause can impact your livelihood. For example, if the non-compete clause bars you from working in a 20 mile radius for 2 years, are you willing to move or drive 20 miles each way to get to work? During your early interviews with the practice, find out where the patients are coming from, other potential places of employment and their locations, and have an attorney help you analyze how radius impacts you. Remember practices that do not exist now but open within the specified restricted geographic area later may also be covered by your non-compete agreement. Limiting the non-compete clause should be of paramount concern. Although courts in New York and New Jersey generally do not favor non-compete clauses, courts will enforce them if the terms are reasonable. Moreover, if the terms are too broad, courts in New York and New Jersey may “blue pencil” or modify the non-compete clause to make the terms reasonable.

5) The contract should be specific about your work schedule, work load and number of calls. Make sure that the calls and the work load are equitably allocated. Find out how many calls per week or month everybody else in the practice is doing and how many physicians are you covering when on call. One of the most common reasons physicians change jobs is uneven distribution of work load and calls. Also clarify whether you will have your own office, secretary, assistant and other resources to help you.

6) Will your salary be fixed, based on productivity, or will you receive a base amount plus a bonus based on productivity? This is important to clarify because if any of your income depends on productivity, find out how new patients are allotted, especially Medicaid patients and other insureds with low reimbursement rates. If you will be paid based on productivity, find out if you will be paid based on what you bill or based on your amount collected. This can amount to a huge difference. For example, 35% of what you bill out is an amount that is certain. However, 35% of what is collected is not a number that you want to rely on to pay your mortgage.

7) Termination. Your contract should be very specific about how you may be terminated. For example, it should set forth that you may be terminated for cause if you lose your medical license, can’t obtain malpractice insurance, lose your hospital privileges, or if you are convicted of a felony. Employers often try to add a laundry list of reasons to terminate an employee, for cause, many of which effectively negate the employment term protections and notice provisions in your agreement. This is a critical area of concern for employees and employers.

8) Financial documents. It is helpful to see the practice’s financial documents for the past 3 years because if you join, the practice’s financial health also becomes your financial health. Examining the tax returns, revenues and expenses will tell you whether they can afford to retain you or not and maintain the necessary resources. These materials can be helpful when comparing practices and evaluating different offers.

9) In the event you leave or are terminated, you should review what will be your access to patient records. You may need them if you get sued or they are needed as part of a board certification process.

10) If your goal is to become a partner, a defined partnership track . Most importantly, ask what type of buy-in the practice has and how much money is involved. It is better to know how much the buy-in is now rather than to work there for 3 years and then decide to leave because the buy-in is too much money.

If you are considering joining hospital or a physicians practice, our experienced employment lawyers can help you evaluate and negotiate your physician employment contract. Email or call us now at (800) 893-9645.

Thank you for visiting our Blog. This blog provides general information and thoughts about various employment law issues primarily in the New York Tri-State area and occasionally in other areas. You are welcome to read the posts. However, do not construe any content on this blog as legal advice or the creation of an attorney-client relationship. Again, we provide the content only for informational purposes. You should not make decisions based information on our blog since the application of the law depends on the facts and each situation may be different. In addition, the law in most jurisdictions is different and changes constantly and we make no representations that any information on our blog has been updated. The Blog should not be used as a substitute for competent legal advice from an experienced employment law attorney in your state or jurisdiction.

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