5 Elements to Consider for Negotiating Employment Agreements

There are important elements for negotiating an employment agreement with a hospital, health system, or physician group.  We have noted five key elements and questions that you can use as a starting point when considering contract-related items. 

1.       Compensation


“Am I being compensated fairly?  Will I be able to earn incentive compensation under the terms of the agreement?”

2.       Benefits


“What benefits does the employer offer?  Should I ask for any additional benefits?”

3.       Schedule and call


“Schedule and call:  What are my call and coverage obligations?”

4.       Terms and termination


“What is the actual term of the employment agreement?  What are the termination provisions?”

5.       Restrictive covenants


“If my employment ends, will I be able to practice in this area?”

Compensation:  Ensure that your base salary is guaranteed without adjustment for the duration period, which is usually around three to five years.  It is wise to compare compensation to that of physicians with similar skills and experience within your regional area. 

Benefits:  Ensure what type of benefits are offered such as health insurance, malpractice insurance, retirement, license fees, medical staff dues, and stipend for continuing medical education (CME).  Some employers are combining vacation, CME time, and sick leave into a “paid time off” concept, so be sure that the employment agreement specifies the amount of paid time off.

Schedule and call:  Be open about your schedule expectations to ensure they align with the employer’s requirements.  Call and coverage obligation should be explicitly stated in the employment agreement.

Terms and termination:  Most employers include a “without cause” termination provision in the employment agreement allowing you or the employer to terminate employment without cause.  Typically, this notice usually requires a 30 to 90 days written notice prior to termination.

Restrictive covenants:  Many states enforce restrictive covenants requiring limited duration and geographic scope to protect the employer’s interest against competition.  Most restrictive covenants last between one to two years following termination of employment.  “States that don’t enforce restrictive covenants often allow provisions that prevent you from soliciting former patients, employees, and referral sources.”

Reference:  http://www.aafp.org/practice-management/payment/contracts.html