Cautious Congratulations on the Job Offer

Cautious Congratulations on the Job Offer

What should you look out for in On the non-monetary side, there are several employment agreements? concerns such as length of the contract, time

Whether you’re transitioning from commitments to the job, annual paid time off residenttopractitioneroryou’remaking restrictions, commitments on bringing new patients the move to a new facility, there are many potential into the practice, or what constitutes a breach of pitfalls and practical considerations when negotiating the agreement –termination with or without cause. an employment agreement. If you’re just focusing on However, the biggest concern in any professional’s salary, you’re not seeing the whole picture. employment agreement is a non-competition

It’s important to review any employment covenant. Most folks just call it a “non-compete.” As agreement, preferably with a lawyer, for monetary a lawyer, my profession is not allowed to have nonand non-monetary provisions. From the money side, compete agreements that restrict clients from their sure you get a salary, but what about cost of living lawyers when they leave a law firm. Supposedly, adjustments or bonuses? How does that system this is because everyone should have their own work? How are you going to get taken advantage of, choice of a lawyer. But why isn’t that the same for and is there a way to balance it more in your favor? doctors? It seems much more important to have a Compensation bonuses can be structured based on physician you trust than a lawyer, and I’m supposed revenue generated, patients seen, hours worked, to be biased! Regardless, these are commonlyor a combination of these and other factors. If any ignored clauses in employment agreements that of those factors are negotiable, it’s important to lay dormant until you decide it’s time to leave the negotiate those up front. practice. At that point, you’ll scramble to see what

You also need to know your benefits. Who is patients you can take with you, what other practices paying your malpractice insurance premium? What you can join, and whether or not you’re going to get about continuing education expenses, lab bills, and sued when you leave. costs of purchasing new equipment? How about In Missouri, non-compete agreements are 401k and profit-sharing programs? These should disfavored in the eyes of the law. But this does not all be spelled out in your employment agreement. mean they are unenforceable. When an employer Don’t expect any benefit to be available to you that takes the time to provide training and expertise to isn’t directly defined in your contract. its employees, as well as expending resources to

Blake I. Markus, JD Managing Partner, Carson & Coil P.C.

bring in customers, courts will try to enforce reasonable noncompete provisions. It should also be noted that courts have a unique ability to “blue pencil” these non-compete agreements. This means a judge can decide whether a non-compete provision is too strict, and if so, the judge has the power to rewrite the provision to make it more reasonable. No other area of contract enforcement allows this, only non-compete agreements.

There are two main issues with non-competes that get looked at the most: geographic and temporal restrictions. In other words, where can I work when I quit and how long do the restrictions last? For geographic restrictions, Missouri courts will generally lookto the market in which the employeroperates. Ifyou workfor a local practice with patients in a 30-mile radius from the physical location, a reasonable geographic restriction might be 30-50 miles. It gets tougher when we consider larger systems that might operate in multiple states. No court would enforce a nationwide ban on employment, and most courts would never entertain a multi-state restriction. Even a state-wide restriction would be suspect for most physicians. Since you don’t want to fight this on your way out the door, you need to look at these provisions before you sign any employment contract and determine what you can live with.

As for temporal restrictions, Missouri courts will almost always find that a one to two year non-compete is reasonable for any professional position or job requiring an advanced degree. There are even some cases where courts have upheld non-competes in excess of three years for executives or business owners who sell their businesses, but those are special circumstances. If a timeframe is unreasonable, a court could throw out the entire agreement, or blue-pencil that down to a one- or two-year restriction.

There are certainly more considerations than just time and geography though. You will want to look at any non-solicitation clauses that prevent you from taking patients with you or contacting them once you’re gone. It needs to be limited to your current practice area, even if the facility has several practices.

Many employers are willing to negotiate any and all of these terms, and the only way to do so effectively is to do it up front. For non-competes, you don’t want to be stuck trying to leave a job where you’re not a good fit and you are hamstrung from going where you will be happier. For the other provisions of your contract, unless you have a unique position of leverage in the practice, making any changes to your employment agreement will be awfully difficult once it’s signed. Review thoroughly, be skeptical, and give yourself the ability to escape unscathed if you find the facility isn’t a good fit from the start.