10 Potential Time Bombs in Your Employment Contract

Leigh Page

Disclosures

October 22, 2015

In This Article

8. You Might Have Difficulty Quitting

Down the road, what if you decide to quit the job? There may be a variety of provisions in your employment contract that could make it difficult to leave.

For example, the contract may stipulate that either party must provide several months' notice before terminating it. This not only gives the employer a chance to find a replacement, but it also can protect you from suddenly losing your job. However, Stadler says, the notice period can be as long as 6 months, and you may not want to wait that long to get on with your life. He suggests in this case that you substantially pare down the notice period.

A similar problem, Stadler says, comes up with an "evergreen contract," which automatically renews unless either party provides advance notice. Either party may choose to amend or terminate it 60 days before it expires, for example.

This is actually meant to help you, Stadler says. If you get busy and forget to renew the contract, you don't suddenly want to find yourself out of a job. On the other hand, you would be automatically signed up for another term when in fact you wanted to cancel the contract or alter some provisions. If you don't like the automatic trigger, Stadler says, ask to have it removed and just make sure to remember the expiration date.

It's important to look carefully at the fine print. For example, you may be required to pay back your signing bonus. In many cases, if you leave within 3 years of being hired, all or part of the money must be paid back, Stadler says. Regardless of what you did with the money, the taxes you paid on this income won't be refunded to you.

The contract may also require you to forfeit your last productivity-based bonus payment if you leave, Hursh says. That's because the contract may state that you have to be employed to get the bonus, which means that if the payment date is after you leave, you don't get the money.

"I've seen doctors miss their bonus payment by a few days," Hursh says. "A doctor could lose $80,000 in bonus money by leaving on a Monday instead of a Friday." The problem could be fixed by guaranteeing that you receive the bonus payment even if you're leaving.

Bonus or no bonus, it can also be very difficult to take your patients with you when you leave. This is enforced through the employment contract's nonsolicitation clause, which bars you from asking your patients to come with you, such as through an email or signs in your waiting room announcing your departure.

Reinstein says some contracts provide that the doctor and employer cowrite the departure notice, but such collaboration may break down in the end, because each side has opposing goals. "The employer will want the notice to say that it will provide a new doctor and life will go on as usual," he says, "but you'll want it to say that the patients have the option of coming with you."

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