5 red flags to watch for in your first physician-employment contract

By Naveed Saleh, MD, MS | Fact-checked by Barbara Bekiesz
Published June 23, 2023

Key Takeaways

  • Fellows should not be timid when faced with their first physician-employment contract and advocate for their best interests.

  • Potential red flags include vague language, inopportune dates, and overreaching non-compete clauses.

  • When in doubt, it’s good to employ a lawyer to help negotiate the contract.

After years of demanding training, intense study, and untold sleepless nights, securing your first physician-employment contract is a time for celebration. However, as with any binding document, it needs careful consideration before you sign the dotted line.

Negotiation is key

The AMA advises new physicians to weigh the positives and negatives of both the employment offer and the potential employer in aggregate.[] Negotiating the physician-employment contract can present an opportunity to advocate for your interests and those of your family, too, as they will also be affected by the terms of your employment.

Fellows who are first entering the job market may “feel self-conscious or timid about raising issues or trying to negotiate, such as for a relocation bonus," notes the AMA. "Do not let this stop you," they add.

Related: Relocating? Here's how to ease the burdens of moving

"Potential health care employers will expect you to ask questions, and doing so will demonstrate that you have done your homework."

American Medical Association

With all these points in mind, here are five red flags to watch out for when securing a permanent job as an attending, modeled on advice from the AMA, the American Academy of Family Physicians (AAFP), and other trusted sources.

Red flag #1: Vague language

Vague language or terms that favor the employer can pop up in any part of the contract. In particular, it’s important to watch for anything that is judged by the practice to be at its “discretion,” according to the authors of an article from the NEJM CareerCenter.[] This wording leaves the physician subject to the whims of the employer during the contract’s duration. 

Instead, physicians can negotiate that the terms be changed to “fair and reasonable,” as well as being in accordance with terms for other colleagues. 

An example of a discretionary clause is one that might require the potential new hire to work at satellite facilities, necessitating long commutes to distant locations—and a serious crimp in lifestyle.

Red flag #2: Unfair non-competes

The FTC is considering a retroactive ban on non-compete agreements, as reported by MDLinx.[] Although the impact of non-competes on the physician workforce remains to be seen, experts agree certain non-compete clauses in a contract are no good. 

Non-competes typically specify that physicians aren’t allowed to poach a patient when taking a new job. However, unsolicited continuity of care should be fair game.

In other words, says the AAFP, you should challenge any clause that bars you from seeing a patient who seeks you out.[] After all, patients are free to choose their provider, and they often prefer continuity of care.

Another type of non-compete clause to challenge, according to NEJM CareerCenter, involves overreaching stipulations that preclude future employment at certain competitors for a specified period of time (eg, 2 years)—including other practices and hospitals. These types of non-competes could seriously inhibit future work prospects.

Red flag #3: Unreasonable dates

The experts at the NEJM CareerCenter also advise that dates on any contract should be scrutinized, and physicians should feel comfortable asking for reasonable adjustments. For example, if a contract requires that health insurance benefits start on the first day of the month following hire or 90 days thereafter, premiums may have to be paid personally during the interim. If dates can’t be changed, the potential new hire can ask the employer to cover premiums until insurance coverage begins, at a minimum. 

Related: Expert advice for fellows on choosing the right insurance coverage

Another example of dates that can be challenged, says the AAFP, includes stipulations that the potential new hire cannot voluntarily switch jobs until 1 full contract year of employment has elapsed. 

With these clauses, physicians may not be able to take a better job offer that emerges. 

Moreover, with contracts kicking in at the signing (not the start) date, this could mean an additional delay of 6 months or so before the physician is able to consider new offers.

Red flag #4: Lack of dedicated time

Contracts that state only the minimum number of patient hours per week—with no time allotted for administrative or other tasks—can be overly taxing. 

As the AAFP explains, 40 hours of patient care can amount to many more hours in time spent with EHR, prior authorizations, referrals, and so forth.

It’s important to spell out clearly to potential employers what the scheduling expectations are, and ensure these expectations are written in the contract.

Red flag #5: Termination at will

Any physician-employment contract should require the employer to provide fair, written notice of the cause of termination, notes the AAFP. The cause can include things like failure to fulfill requirements, comply with policies, or complete EHR in a timely fashion; the opportunity for the physician to remediate the situation within a reasonable period of time should also be allowed. It’s imperative to ask whether subjective termination provisions demand that the employer act reasonably and in good faith when firing a physician.

What this means for you

Your first physician-employment contract is a hard-earned accomplishment. When reviewing the contract, it’s important to keep an eye out for potential red flags. These red flags should be challenged as necessary. When in doubt, it’s an excellent idea to employ a lawyer to help review and negotiate your contract.

Read Next: Nailing the interview: Strategies for landing your first post-fellowship job
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