Red Flags in Physician Employment Contracts 

Signing a physician employment contract can seem like the end of a very long road, and it is tempting to simply sign the contract in front of you and accept it as-is. However, some contracts may contain red flags–terms that can appear standard at first glance but carry hidden consequences. Identifying these red flags before signing on the dotted line is essential for protecting your professional autonomy and financial future. These are some of the most common red flags in physician employment contracts.

Ambiguous Job Duties

One of the most overlooked red flags in physician employment contracts is the presence of vague or poorly defined job responsibilities. The agreement should clearly outline the physician’s expected duties, including clinical hours, patient load, administrative tasks, and on-call coverage. If these areas are ambiguous, then the employer could unilaterally increase responsibilities and could do so without increasing compensation. Work hour clauses in physician contracts often require a minimum of 40 hours dedicated solely to patient care, excluding administrative tasks like EHR documentation, prior authorizations, and reviewing test results.

It is important to clarify how much time will actually be spent with patients versus handling administrative duties. Evaluate call coverage to ensure duties are fairly distributed among physicians, as unequal assignments can strain morale. Check whether on-call shifts are compensated separately or included in the base salary, as bundling can reduce earnings. Clarify the frequency and duration of on-call shifts to prevent excessive demands that disrupt personal time.

Lack of Clarity Regarding Termination

The contract should require the employer to provide written notice of the reason for termination, such as failure to meet contract obligations or noncompliance with policies—and allow you the opportunity to correct any deficiencies within a reasonable timeframe. Pay close attention to provisions allowing termination without cause, ensuring they include adequate notice or severance pay for financial stability. If possible, negotiate reciprocal termination rights to maintain flexibility. Additionally, termination for cause provisions should specify clear grounds for dismissal, such as malpractice, criminal conduct, or breach of contract, to avoid ambiguity and ensure you have a clear understanding of what could lead to immediate termination.

Subjective grounds for termination, such as your reputation or perceived conduct, are red flags, as they leave things open to interpretation and could be an excuse to terminate you despite exemplary service.

Non-Compete Clauses

Non-compete clauses limit a physician’s ability to practice within a specific geographic area or time frame after leaving an employer. They can significantly restrict future employment opportunities. The duration of a non-compete clause specifies how long the restrictions remain in effect, typically ranging from several months to years. Excessively long durations can severely hinder a physician’s ability to secure new employment or to establish a new practice. The geographic scope of a non-compete defines the area in which the physician is restricted from practicing, often expressed as a specific radius or designated regions. Broad boundaries can be particularly challenging for physicians in specialized fields or rural areas with limited job opportunities. Additionally, the scope of practice clause defines the specific practice areas or specialties it restricts, which can significantly affect physicians with multiple areas of expertise or those providing both clinical and non-clinical services.

Unclear Dispute Resolution

Physician employment contracts should include clear provisions for resolving disputes, such as mediation or arbitration clauses. If these are missing or structured to heavily favor the employer, that is a red flag. Without a defined dispute resolution process, conflicts can become prolonged and more costly. Physicians should be especially cautious of provisions that restrict access to legal remedies or mandate employer-controlled forums. Unilateral arbitration clauses may require physicians to waive important legal rights without fair compensation or recourse. It is best if contracts clearly state how disputes will be handled, where arbitration will occur, and who will be responsible for associated costs.

Verbal Promises

A written contract might have terms that a physician disagrees with, and the employer might reject editing the written draft but make a verbal promise. Consider how comfortable you are moving forward without written confirmation and what the potential consequences might be if the verbal promises are not upheld. Signing an employment agreement with the expectation that a term will be modified later or will not be enforced can be a costly mistake. Relying solely on verbal assurances, emails, or side letters typically won’t hold up if a dispute arises. In most cases, courts and legal professionals focus on the written contract itself, not informal communications or unwritten agreements. If a specific term is important to you, insist on having it included in the written agreement before signing.

How Physician Employment Contract Attorneys Help

You may wonder whether you can even challenge the terms or if the employer will withdraw the offer. Yes, physicians can contest specific contractual clauses; however, it is important to negotiate undesirable terms before you sign. Run the contract by an attorney. An experienced healthcare contract attorney can play a critical role by identifying red flags, negotiating more favorable terms, and clarifying ambiguous legal language that could otherwise be misunderstood. They can also help physicians understand the long-term implications for their practice, income, and professional mobility with the contracts in the clauses. Given the complexity and significance of these employment contracts, obtaining professional legal guidance is not merely advisable but is a prudent investment in the stability and longevity of a physician’s career.

Contact a Physician Employment Contract Attorney

Physician employment contracts are more than just onboarding paperwork. They are agreements that shape your daily responsibilities, financial stability, and legal protections. Overlooking red flags or assuming standard terms are “non-negotiable” can affect your financial as well as emotional well-being. A well-reviewed, well-negotiated contract not only protects your contractual rights but also provides you with peace of mind as you grow in your career. Reach out today to discuss.