associate agreements C D A J O U R N A L , V O L 4 9 , Nº 2
Associate Agreements: Negotiating Hidden Pitfalls and Benefits Michael Kowalski, DDS, JD
abstract Some of the significant factors to consider with an associate agreement are whether the associate dentist will be classified as an independent contractor or employee, provisions to protect the trade secrets of the practice and a workable method of dispute resolution.
AUTHOR Michael Kowalski, DDS, JD, has lectured and authored numerous peer-reviewed professional journal articles and textbook chapters on risk management, professional liability and dental licensing issues. Dr. Kowalski has defended doctors for over 20 years in the areas of professional liability, administrative licensing board actions, business law and estate planning. Conflict of Interest Disclosure: None reported.
W
e all deal with contracts in our lives. Dentists are no different. However, the business of dentistry is changing. In particular, due to the significantly higher cost of a dental education, fewer new dental school graduates are buying existing dental practices. More dental school graduates are looking for jobs as associates in existing practices because they cannot afford to purchase an established practice. Moreover, there has been a recent fluctuation in California law concerning independent contractors. This article provides an overview of associate agreements, with the spotlight on classifying an associate as either an independent contractor or an employee. Written contracts provide structure and stability to a dental practice. Errors or poor judgment in contractual relationships can seriously harm a practice. Dentists emphasize prevention to their patients. Prevention in the form of knowledge and guidance from legal professionals allows dentists a way to avoid some of the common pitfalls of working with contracts and can make a smooth and profitable associateship.
Essential Elements
One of the first contracts a new dental school graduate or specialist will enter into upon completion of a residency is an agreement to be an associate dentist for an owner-dentist of an established practice. The associate arrangement is a contract. Like any other contract, it can be oral or in writing. Basically, a contract is a set of mutual promises that the law will enforce. The elements of any contract include terms that were bargained for by both parties. There is a meeting of the minds where each party understands what they must give up to get what they want from the agreement, which results in an agreement where the parties have realistic expectations. Two prime issues come up with associate agreements. The first is whether the associate dentist should be treated as an employee or an independent contractor. The second has to do with protecting the practice from competition by the associate after separating from the practice. In California law, the default is generally that an associate is an at-will employee, unless altered otherwise by an agreement between the parties. At-will employment is defined in the FEBRUARY 2 0 2 1
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