Despite what you might see on Suits on another legal show, where lawyers get their clients out of bad contracts simply by fast talking or spitting out witty remarks, the reality is quite different. Contracts, including employment contracts, are binding documents. Once they are signed, a party who wants to challenge or avoid the terms of the contract, is likely to incur significant legal costs doing so.
With that in mind, anyone entering into a contract should carefully consider all of the terms. When it comes to physicians’ employment agreements, here are the top 5 mistakes I have seen physicians make when signing employment agreements.
Signing an employment agreement without reading it or understanding it.
Given how highly-educated physicians are, arguing to the court later that they did not understand or did not have time to read the agreement before signing it is likely to be a losing argument. Courts are no sympathetic to parties arguing they did not understand or did not read an agreement, when such parties are highly-paid and highly-educated.
Failing to negotiate non-compete restraints.
Most medical practices, and, especially, large hospital systems in Texas and other states, will require physicians to execute non-compete restraints as part of their employment agreement. Such restraints prevent a physician from working for competitors of their employer upon their departures within a certain geographic range, which can range from a few miles (in urban areas) to hundreds of miles (in rural areas). These restraints are enforceable in Texas, if they meet certain requirements, and physicians should never ignore them when considering an employment offer.
Failing to negotiate the location, schedule, and other key terms.
A lot of physician employment agreements will state that a physician will work at a certain location or any other location to which he or she is assigned by the employer. Physicians should make sure that the contract includes language that allows them to control what locations they are assigned to. Otherwise, especially if it is a growing practice, they may end up working for locations they never envisioned working for and that make no economic sense to them. Same goes for negotiating schedule and hours – a physician should make sure they have control over any changes to either of those terms during the employment.
Failing to make sure that oral promises are included in the agreement.
I see time and again – a medical practice promises something to a physician when they are trying to recruit him or her, but that promise is nowhere to be found in the written employment agreement. Unfortunately for physicians, those oral promises go out of the window the moment they sign that employment agreement. From that point on, only the written promises count. In fact, most employment agreement will contain language that specifically disclaims oral promises.
Relying solely on friends and mentors when negotiating the terms.
While it is always a great idea to do online research and talk to friends and mentors about an employment offer to ensure you getting a fair market compensation, when it comes to understanding the actual terms of the employment offer and what legal consequences they carry, friends and buddies who are not well-versed in employment law are not the best resource. Each employment agreement and circumstances of the employment offer are different. The only way to ensure that you understand the terms, the legal consequences, and are able to negotiate the best offer for YOU is to consult with an attorney.
Leiza Dolghih is the founder of Dolghih Law Group PLLC. She is board certified in labor and employment law and has 16+ years of experience in commercial and employment litigation, including trade secrets and non-compete disputes. You can contact her directly at leiza@dlg-legal.com or (214) 531-2403.