Signing an employment agreement is a significant step in your career, especially in the healthcare field. It’s crucial for all healthcare practitioners to understand the business terms outlined in the agreement before signing on the “dotted line.” Here are five considerations to keep in mind when presented with a new opportunity, to ensure a mutually beneficial and legally sound employment relationship.

1. Timing is everything. In light of current staffing shortages among several medical specialties, healthcare entities may try to get practitioners to sign an agreement quickly, and may even offer a signing bonus to expedite the process. The primary goal of the negotiation period should be for both parties to be fully comfortable with the agreement, and practitioners who feel rushed to sign often end up not understanding the terms or realize months later that they signed a bad deal. Care should also be taken not to unnecessarily prolong the negotiation stage. It’s wise to mutually establish a reasonable timeframe for reviewing, negotiating and finalizing the agreement.
2. Don’t be shy. Contracts are two-sided. Healthcare entities, especially hospital systems, sometimes present their agreements as non-negotiable, often referring to their agreement as a “standard template.” However, it’s usually possible to request reasonable modification, and most employers are respectful of practitioners who ask for reasonable changes. Additionally, don’t be discouraged from contacting a lawyer. Some practitioners, especially recent graduates of residency programs, are hesitant to consult a lawyer, being under the impression that hiring a lawyer may set the tone for a bad relationship. However, an experienced lawyer will make sure the practitioner’s interests are protected.
3. Pay close attention to any restrictive covenants, especially non-compete clauses. Non-compete clauses, typically designed to prevent a practitioner from competing with the employer in a particular geographic area for a period of time after the employment terminates, are extremely common in healthcare agreements. Enforcement, however, varies based on the factual situation and is subject to proposed legislation in New Jersey, which, if enacted, would restrict the use of restrictive covenants for physicians and nurses contracts. Practitioners should generally assume that any restrictive covenant may be enforceable and should absolutely make sure they are comfortable with the restriction before signing the agreement.
4. Termination. A crucial aspect of any employment agreement is understanding the ability to leave and the terms and conditions thereof. Practitioners should carefully review the termination clause, taking note of who can terminate and under what conditions. Practitioners who receive compensation based on work generated or collected should make sure they are entitled to post-termination reconciliation of earnings up to a few months after the termination.
5. Professional liability. Practitioners should pay close attention to the sections outlining liability, including any indemnification clause and professional liability coverage. Specifically, practitioners should consider the type of coverage (occurrence-based versus claims-made), who is responsible for paying for the policy, and what specifically the policy includes. Practitioners who perform outside activities, for example, as a medical director or consultant at a local hospital, or at their home on Shabbat afternoons so their neighborhood kids can avoid a trip to the emergency department, may not be covered for those outside activities.

Bottom line: Practitioners need to understand every term in their employment agreements. Too many practitioners focus on the dollar sign, and fail to dedicate time to the rest of the contract. Make sure to clarify any ambiguous or missing language before signing the agreement. If there are outside documents mentioned in the agreement, such as company policies, ask for copies. If hiring a lawyer, make sure the lawyer knows what your priorities are to enable them to provide sound advice. Knowledge of the advantages and drawbacks prior to signing is of paramount importance.

Rebecca Falk, a resident of Hillside, is an attorney at Brach Eichler, where she represents a variety of healthcare clients, including individual practitioners, concierge medical practices, large provider groups, ambulatory and long-term care facilities, and professional societies, with their regulatory and transactional legal needs.