Let’s talk more about the physician employment agreement in today’s video.

I’m Michael H. Cohen, founding attorney of the Cohen Healthcare Law Group. We’ve had the pleasure and good fortune to advise hundreds and hundreds of healthcare industry clients on healthcare and FDA legal issues.

After some preliminary material in the physician employment agreement we’ve talked about elsewhere, there’s an all-important section describing the medical doctor’s compensation.  This section actually can get quite complicated.  It might include, for example, a base salary plus a percentage of collections from the physician employee’s own patient visits.

There could be expense reimbursement for designated expenses; and, certain described benefits.

Termination is another important section.  In California, we have an employment law doctrine known as “employment at will.”  This means that the medical group or medical practice or professional medical corporation can terminate the medical doctor’s employment at any time, for any reason – with or without a reason.

Typically, to soften the blow, the employment agreement will designate a notice period—it’s usually 14 days, unless otherwise required by law, or of course otherwise negotiated.

Physician employment agreements also will reference a number of events any of which will constitute “cause”—cause is reason enough—for termination. So, even if you are not in an “at will” state, or subject to at-will employment, you’re got the four clause provisions to look out for.

For example, an act of theft or dishonesty by the physician employee; refusal to perform duties or abide by the applicable policies and medical practice; and, of course, professional negligence will count as well.

Next, the employer might have provisions to protect its intellectual property.  Depending on how extensive they are, these provisions can actually be quite onerous for the employee and need to be looked at carefully.  For example, what if the employee (that could be you, unless you’re the employer) discovers some new diagnostic technique, or therapy, on their lunch hour, while outside the office?  Who owns that discovery, and has the right to commercialize it?  As employer, you have to draft this section super carefully, and as an employee again, be sure you read it and have your attorney read it.

There also might be a non-competition clause.

We know that different states have different rules as to whether or to what extent their own courts will or will not enforce the non-competition clause.

We also know from experience that many medical doctors sign non-competes without getting legal review of their employment agreement and it comes back to bite them later.  Whether or not these non-compete sections are in fact, actually, legally, enforceable, they hang over physician employees’ heads like a sword of Damocles, amplified by a nasty demand letter from the former employer’s legal counsel.

The best advice for a physician employee, which we’ve said in the past, is to have their employment agreement reviewed by their own legal counsel before signing, and then, to negotiate their way through or completely out of a non-compete, even if they think that it might be unenforceable because somebody told them so.

And there is the provision about non-solicitation of patients.  We talked about this on another video. It’s a clause that can cause a heap of trouble, given that patients will want to reach you as their physician after you’ve left a practice, and, you have an ethical duty and legal duty to not abandon the patient.

Again, it’s always best to have legal documents reviewed before you sign them that could be said again and again but still people need to pay attention here.  Your employment agreement might look boilerplate, but there’s a lot hidden inside and that’s why we want to canvas some of these issues today.

Thanks for watching. Here’s to the success of your practice or healthcare venture, we really look forward to talking to  you soon.