Hidden Dangers in Your Employment Contract

Batya Swift Yasgur, MA, LSW


April 12, 2017

In This Article

How Foolproof Is Your Contract?

"When you hear hoofbeats, think horses, not zebras." This old adage encourages physicians to look for obvious explanations, rather than hidden diseases, when examining patients. But although this may be wise advice when looking at your patient's chart, it is less wise when looking at your employment contract.

"A contract can seem straightforward on the surface," observes Jon Appino, MBA, principal and founder of Contract Diagnostics, a Kansas City-based consulting company that specializes in physician employment contract reviews. "But there are hidden holes that physicians all too often fall into."

Many "holes" are tucked away in legalese and small print, but some are actually hidden in plain sight.

"I have clients who showed contracts to online lawyers and were told, 'Everything looks fine and legal.' But you might be in for a rude awakening if you do not understand the full ramifications of your 'fine' contract," he warns.

"It is in the employer's interest to be ambiguous," Appino says. And many employers are silent about key issues, leaving the uninitiated physician to make assumptions that might not be accurate. "So the employer's and the employee's expectations have to be clearly spelled out, with no room for guesswork."

A Mixed Welcome

Contracts typically offer welcome perks, such as signing bonuses, relocation assistance, and student loan forgiveness. "These incentives sweeten the pot," comments Dennis Hursh, Esq, managing partner of Hursh and Hursh, PC, a Pennsylvania-based law firm focusing on representing physicians. "But many physicians don't realize there are strings attached."

The most common "string" is that you may be required to stay at your job for a certain number of years. "If you leave before the term is up, you have to repay some or all of these perks," says Hursh, who is the author of The Final Hurdle: A Physician's Guide to Negotiating a Fair Employment Agreement.

Terms of repayment can vary. "Often, these bonuses are amortized, so if you leave after 2 years of a 3-year contract, you only have to repay one third. But some systems insist on the full amount, or even repayment of recruitment fees." It is critical to try to negotiate a prorated arrangement.

Repayment may also be required even if your employer is the one who terminates your employment. And if you die within 3 years, the employer might go after your heirs.

The contract should specify what your employer regards as grounds for termination, such as failing to reach certain quality or productivity benchmarks, Hursh advises. "There should be a clause that if your employer terminates you without cause, if you become disabled, or if you die, you (and your heirs) are not responsible for repayment."

And consider your long-term objectives. "If you're not sure you want to stay for 3 years, think twice about the risk before signing," Appino advises.


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