​Legal ​Issues Upon Entering Practice

This discussion of legal issues is not intended to be legal advice, but a description of some areas where having legal understanding and advice may be important. Regardless of your personal comfort with a potential practice, its recruiting enticements, and its employment contract, review by your personal advocate will protect your interests and enhance your understanding.

Do I have to have an attorney to seek or accept a position?

No, you don't. You are an adult, allowing you to sign and be bound by a contract and its provisions. You may be offered a contract and told "this is 'it,' the contract is signed by all of us, and it is non-negotiable, so go ahead and sign it". Although that is your option, a more reasonable approach would be for you to gain full understanding of every nuance of the contract before signing—and you'll need an attorney to help you. This is particularly important to assure that all the promises made during the recruiting process are reflected appropriately in the contract.​

Should I have an attorney for this purpose?

This is the more appropriate question and the answer to that question is "yes," if you desire full understanding of your contract and to be assured your interests are protected. A contract offered from a potential employer will be prepared by their attorneys to protect the interests of the employer. The degree to which it also fully protects the employee can only be determined through review by an employee advocate. An attorney experienced in medical employment law should be identified and retained by you.

Do I need an attorney to negotiate terms of employment?​

In most cases, you should not. Communications with potential practice associates, and/or with hospital, university, or practice management group representatives should allow you to work out details in lay terms, often expressed in a letter. [See section on interviewing] If such a letter is not forthcoming from a group with whom you have discussed and agreed to terms, feel free to send a letter expressing your understanding and offering to discuss any apparent disparities. Once an employment contract is offered, you and your attorney can compare the documents and help assure that the contract formalizes the understanding. In most cases, it is much preferable and much, much less expensive to work out the understandings yourself and use the lawyer for review rather than to have an attorney negotiate the details.

What if I am to be employed by a large group or institution through their standard employment contract, which is said to be non-negotiable?

Some large institutions or groups will have considerable experience in contracting and have many physician employees. It is likely their contracts are well worked-out. Nevertheless, full understanding of all the contract's provisions requires legal assistance making legal review highly recommended. Also, agreements pertinent to your specific employment could possibly require addenda or revisions to the standard contract.

What are the major components of an employment contract?

1. Parties. The contract will state that you are entering an agreement with a personal or corporate entity, thereafter referred to as employer, you being the employee. The employing party may be an individual physician, a partnership, a professional corporation, a university or medical school, a multispecialty group, or a hospital. Whoever officially represents the employing entity will be the "boss".
   
   
2. Relationship between the parties. In most first employment contracts, the newly hired individual will be an employee. Depending on the nature of the particular practice, one may or may not be able to advance to shareholder or partnership status as a sequel to the original contract.
   
   
3. Term. The starting date will be defined and requires that the employee is on site and ready for duty. Some contracts will be for a specified term, generally one year. In that case, the contract should provide for decisions to be made for the subsequent year. There may be a statement that the contract will remain in force for an additional specified time period unless notice is given by a certain date by either party. Other contracts will not specify a term and the contract will remain in force until provisions under 'termination" are met. In either of these situations, the contract should indicate the process for negotiation ongoing compensation and benefits.
   
   
4. Termination
   a. At will. Most medical employment contracts are "at will" contracts; either party may terminate the contract for any reason, or for no reason. Generally, termination at will requires a period of notice to allow the other party to prepare for job-searching or recruiting. This period of notice should be similar for each party and be sufficiently long to allow for preparations to be made. The contract should include separation provisions, including duration of compensation (generally the length of the notice period) and responsibility for liability insurance tail coverage.
   
   b. For cause. Termination for cause implies breach of the contract. Breach may occur by failing to fulfill specific provisions of the contract, such as failing to appear for assigned duties, or breach may occur should the employee lose the requisite licensure or privileges required to provide services to the employer, or be guilty of a felony. Determination of cause involves due process procedures and legal representation. When terminated "for cause," separation often is immediate, compensation ceases, benefits are suspended, and tail-coverage is not provided.
   
   c. Non-certification. Contracts may require the individual to attain board-certification, generally within a time frame allowing two or three attempts at the certifying examination. Failure to attain (and maintain) certification can result in termination or non-renewal.
   
   
5. Non-compete clauses. Non-compete clauses define a period of time and geographic location in which a departing employee is prevented from engaging in a competing practice. The legality of non-compete clauses varies by jurisdiction. When present, the degree to which they are enforced also may vary. Some contracts may have a non-compete which is unenforceable simply to discourage a departing physician from competing. When a non-compete is able to be enforced, the departing employee often will have to leave the area at considerable expense or wait out a time period specified in the contract.
   
   
6. Duties.Physician contracts generally provide that the employee will provide his/her professional services solely for the employer. Specific duties may be listed, but often the description is vague—"employee will provide such professional services as are usual for physicians in similar practice or with similar training" or "physician will fulfill such duties as assigned by the employer" or "employee will share practice duties with practice colleagues as assigned." Because breach of contract for cause can be invoked for failure to fulfill contract duties, understanding of what the job can and does demand is essential. For example, in discussion with a four member group seeking a fifth neonatologist, you may have an impression that call would be every fifth night. Unless the contract specifically limits your call to every fifth night (unusual), should the practice lose one or two associates, you could be bound to every third or fourth night coverage, because the practice has an obligation to the NICU to provide 24/7 coverage. Contracts may also state that all remuneration for work done as a neonatologist will come to the employer. If applicable, employees should negotiate exclusions for books, inventions, etc. that fall outside of the generally assigned practice duties.
   
   
7. Benefits.
   Contracts vary greatly in their menus of benefits. Specific topics which may result in contract benefits may include:
   •Health and Medical
   ◦Insurance
   ◦Benefits beyond insurance coverage
   •Liability insurance
   ◦Type: Occurrence vs. Claims-made
   ◦If Claims-made, responsibility for "tail" (depends on who leaves whom?)
   •Disability insurance
   •Life insurance (often associated with shareholder status)
   •Licensure expenses
   •Certification and Maintenance of Certification( time and funds)
   •Professional expense coverage (books, meetings, periodicals)
   •Professional organizational memberships
   •Compensation
   
   
8. Vacation and time off. Most practices provide time off for vacation and for attending (approved) professional meetings. Time off provisions should also include reference to pregnancy/family leave and to medical leave.
   
   
9. Indemnification.  Many contracts include paragraphs indemnifying one party or the other. These may be complicated and need to be discussed with counsel to be understood by the average physician.

What if my credentials have not been accepted by my start date?

As noted above, most contracts provide that the employee must be eligible to provide service to the employer for employment (and compensation) to begin. To practice, the individual physician has to acquire licensure from the state and privileges from the hospital(s) covered by the practice. The process of state licensure varies greatly among the states. Some provide reciprocity, others do not; but, all require several weeks to months from application to acceptance. Hospital credentialing requires state licensure, and privileging for subspecialists may take added time depending on the documentation requested to attain privileges for specific procedures. Once a decision is made to move to a different state, immediate contact with licensing authorities is a good idea. The state and the hospital will have requirements for maintenance of licensure and privileges which should be reviewed. In order for compensation to be paid by insurers and health plans under a specific physician's name, he/she must apply to the insurer, be accepted, and obtain a billing number. The practice should commit to assist in this essential procedure.

Will I have to become certified by the ABP, Sub-board of NPM?

In general, employment contracts for neonatologists require completion of fellowship training creating eligibility for board certification, which has to be achieved within a certain period of time, usually four to five years. Practices can require certification for continued employment. With time-limited certification, practices and hospitals may require participation in the Maintenance of Certification in Pediatrics (NPM Sub-board) as a condition of continued employment.

What incentives can I seek from a potential employer?

Reasonable incentives are often provided to attract physicians to practices and communities. Consultation with your attorney or accountant can determine the associated tax liabilities of these incentives, such as signing bonus, moving expenses, etc. Because neonatology practices are closely linked to hospitals with NICUs, practices may seek or receive recruiting assistance from the hospital. Should that occur, federal laws prohibit enforcement of a non-competition clause. Note also that many contracts include a paragraph indicating that the contract reflects the full and complete agreement between the parties and nullifies all earlier understandings, whether verbal or in writing. For this reason, be sure that the contract addresses all of the issues promised in your discussions with the employer.

How do I determine how much I should be paid?

The employment contract will certainly include a paragraph on compensation. Basically, the contract should state the salary promised and indicate when salaries are distributed. Schedules of prevailing compensation are available from a number of sources and should be reviewed carefully. Standard of living varies around the country, making a given salary that is more than adequate in some places inadequate in other sites. You should receive indication of expected potential salary over time and the process leading to advancement.

How else may an attorney be helpful?

In addition to employment, moving to a new environment will involve purchase of real estate, and the future earning potential from medicine should be associated with state-appropriate estate planning and updating your will.