Advice for Young Physiciansby Scott Einiger, Esq.
Physician Employment Agreements: General Advice for Young Physicians
As a young physician going into private practice, one of the first and most important decisions you will make is selecting a professional affiliation with another physician, group practice or hospital. This decision will have far-reaching effects and may likely shape the course of your professional career. It should not be undertaken lightly.
In deciding which employment offer to accept, meeting with your prospective employer, visiting his/her office and speaking with other employees of the Practice is critical in gaining a comfort level with the Practice philosophy and with the professional work environment. An equally important reflection of the Practice to be considered is the employment agreement presented by the employer. This document will govern the relationship between the parties and should incorporate all verbal representations to ensure that each party understands what benefits (s)he is entitled to and what duties each party is required to perform.
Most employment agreements to some degree contain many similar clauses. However, in order to ensure that your agreement incorporates all of the issues that you have discussed with the prospective employer, it is imperative that the document be reviewed carefully with your attorney to better understand what your primary objectives are, what you are seeking to accomplish and what promises have been made (e.g. of the employment agreements presented what is your geographic preference, what salary range are you seeking, what benefits are most important to you, how soon do you expect to become partner, etc.).
While there are many similarities in general provisions of employment agreements, careful analysis of the specific provisions is critical in ensuring that the agreement meets the expectations and verbal promises that have been made. For example, in most employment agreements the employer agrees to pay for the malpractice insurance of the employee during employment. Knowing whether this insurance coverage is claims made or occurrence coverage, is critical for the young physician who ultimately may leave the Practice, move out of State or no longer practice medicine. If the malpractice coverage provided to the employee was claims made coverage in some instances “tail” insurance is required to keep the policy in effect for prior acts after the employment terminates which can be very expensive to the party responsible. Clarifying what type of malpractice insurance is being offered and who pays for the tail coverage (if applicable) is critical. (See Frederick v Clark et al 150 AD 2d 981)
Some of the other pertinent clauses of an employment agreement include the length of the agreement; duties to be performed; whether it is an exclusive employment; what your compensation consists of (annual salary, bonus (objective v. subjective), benefits); when partnership will be offered and what the buy-in will be; the covenant not to compete (to be enforceable, it must be reasonable as to duration and geographic area); as discussed above the type of malpractice insurance offered (claims made v. occurrence policies); termination provisions (for cause); and severance pay.
Paying careful attention to the contract details will ensure that you achieve the terms you desire.