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Healthcare Employment and Recruitment Agreements: What You Need to Know Before You Sign

You have worked countless hours and spent a lot of money to earn your professional healthcare degree as a physician, physician assistant, nurse, APRN, CRNA, dentist, dental hygienist, pharmacist, or pharmacy technician.  Now you are ready to go to work in your chosen profession.  Here are some very important reasons that you should hire an attorney with experience in healthcare business transactions before you sign on the dotted line.  It is vital to have a legal professional, who understands the healthcare industry, looking out for your best interests.  Because the healthcare employment contract defines the conditions of employment and can, therefore, greatly impact future professional satisfaction and personal happiness, you need to read carefully and fully understand every aspect of your employment agreement.   An experienced business healthcare attorney can also help you negotiate more favorable employment terms.


It is essential to understand the job duties that you are agreeing to perform.  Will you be working full-time or part-time?  Will you have time allotted for administrative duties and completing medical records and reports?  What about night, weekend, holiday and on-call schedules?  Is moonlighting allowed?  Are you allowed to perform professional services outside of your employment?  If so, does your employer have any right to the money that you earn from such activities?  What ethical and other standards will you be expected to meet?  What are your obligations in connection with billing for your services - do you need to understand medical coding?  The employer's duties should also be set forth in the employment agreement is sufficient detail.  All of these issues will affect the quality of your employment and, if you don't know the answers to these questions, the result might be a very negative employment experience.

Compensation and Benefits

Generally, physician and healthcare professionals are compensated under one of two models: flat salary or base salary plus performance bonuses.  Base salary plus performance bonus models can be very complex and hard to understand.  This structure often has pitfalls that result in the physician or healthcare professional making less than anticipated, especially if there are salary guarantees for the first few years of employment.  You may also be entitled to severance and deferred compensation and disability compensation.  Having an experienced healthcare attorney explain the nuisances of your compensation structure can avoid unexpected income shortfalls.

You also need to understand your benefits package.  Some standard benefits that healthcare employers provide are: malpractice insurance; health, dental and vision insurance; life and disability insurance; retirement pension plans; reimbursement for continuing medical education; and vacation and sick time.  These are variable from employer-to-employer.  An experience business healthcare attorney can help you understand your benefits package and negotiate with your employer to get you additional benefits.

Another important question to be asked:  will you have the opportunity to become an owner in the practice at some point?  If so, is the partnership track specifically laid out in your employment agreement?  If it is your goal to be a partner in the practice, it is imperative that you understand the expectations you need to meet and how the purchase price for your ownership interest in the practice will be calculated at the time of the buy-in.

 Term and Termination

It is important that you understand when your physician or healthcare employment agreement becomes effective, what the term of the agreement is, and when and how the agreement can be terminated.  Many physician and healthcare employment agreements have what is known as an "evergreen clause," which provides that the agreement will automatically be extended at the end of the initial term unless certain steps are taken.  Physician and healthcare employments also often have "without cause" provisions, which allow for the contract to be terminated upon either party giving advanced notice to the other of its intent to terminate the employment relationship.

Non-Compete Clauses and Restrictive Covenants

Often physician and healthcare employment contracts have non-compete  provisions that will restrict your right to practice medicine if your employment agreement is terminated.  Generally, non-compete clauses are enforceable within the Commonwealth of Kentucky if the terms of the clause are reasonable in terms of time and geography.  Physician and healthcare employment agreements may also contain non-solicitation clauses that prohibit you from soliciting other employees and patients from your employer.  These restrictions may impact your ability to practice after the termination of your employment agreement.  Therefore, it is vital to understand all of the restrictions that the employment agreement places on your ability to practice medicine after your employment relationship ends.


Given the important and highly-skilled services that are you are providing as a  physician, physician assistant, nurse, APRN, CRNA, dentist, dental hygienist, pharmacist, or pharmacy technician - and the benefits enjoyed by your employer and your patients, you deserve to have security, autonomy, adequate compensation and benefits, and support in the workplace.  When properly negotiated and drafted, healthcare employment agreements can achieve these goals.  A trained and experienced healthcare business attorney can make the difference in a workable employment relationship or a horrible professional experience. 

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