Even More(!) Reasons to Seek Legal Review of an Employment Agreement
By Guest Contributor Leigh Ann O'Neill for Lauth O'Neill Physician Agency
If you're a nurse practitioner or physician assistant considering a job offer, you've got a lot to consider. This week here at MidlevelU, we've been looking at various considerations for NPs and PAs when it comes to employment agreements (check out Part I and Part II of the trifecta). Our ultimate conclusion? Asking legal counsel to look over your agreement is well worth the time and expense. Here are the final of our Top 10 Reasons Nurse Practitioners and Physician Assistants Should Seek Assistance Reviewing an Employment Agreement.
7. Understanding the Effect of Termination Provisions
In the excitement of being offered a job and the hastiness that often causes NPs and PAs to hurriedly sign the employment contracts that they are offered, many important contract provisions are merely skimmed over or entirely overlooked. One of the most important aspects of an employment contract is the termination provision, and it is imperative to review that provision closely and have a clear understanding as to your rights and the employer’s rights.
As mentioned prior, employment contracts generally contain both “without-cause” termination provisions and “for-cause” termination provisions. The without-cause provisions allow both the employer and the employee to terminate the employment agreement, for any reason or no reason at all, upon providing the other party with a specified number of days of advance notice. The number of days of notice required is very important. The notice periods we often see range from 60 days to 120 days. If an employee wishes to leave her current employment position, she will have to plan substantially ahead in order to adhere to the notice requirement. The period of notice is also important as it may make the difference between an employee moving seamlessly to another employment position or having a period of unemployment. In the event that an employer desires to terminate a provider’s employment without cause, the provider will have to use that time to job search and secure a different employment position, and so a sufficient amount of time is desirous for the employee in that situation. It is also important to note that if an employer wants to terminate an employee, it will almost always do so via the without cause termination provision. This is because using on the for-cause termination rights opens up the employer up to challenge and law suits if it is not clear that the employee has committed any violations or wrongdoing. Rather than face the possibility of challenge or backlash, employers prefer to simply utilize the without cause right and make a clean break.
For-cause termination provisions will allow the employer to terminate an employee based on the employee’s commission of various wrongdoings, one of which is often a blanket provision including “any material violation of the employment agreement.” While employees are held accountable to adhere to the employment agreement and avoid any violations of the same, employers are often not held to the same standard. For this reason, it is important that employment agreements always include language that similarly holds the employer responsible for adhering to the agreement. In the event of the employer’s failure to fulfill its duties and obligations under the agreement (i.e. failing to pay the employee in accordance with the applicable compensation provision), the employee should have the right to terminate the agreement for cause.
Finally, when considering a contract’s termination provision, another crucial aspect to determine is how termination will affect your compensation. Will you be paid for services provided up and through the actual termination date, or will compensation cease upon receiving notice of termination? Especially for providers being compensated under production models, it is very important to clarify these aspects.
8. Ensure Your Right to Access Information During and After Employment
Employment contracts are typically very comprehensive, addressing just about each and every issue that could potentially surround or arise out of employment. As such, the attorneys that draft employment agreements on an employer’s behalf work very hard to cover all bases so that no loose ends remain, regardless of how the employment relationship ends.
From an employer’s standpoint, having a comprehensive employment contract that protects all employer interests is the ultimate goal. Unsurprisingly, an important part of this is ensuring that the employer’s confidential information and documents are protected. Therefore, a provision that we see in just about every single employment contact that we review is one that addresses documents and patient medical records. More often than not, the applicable language will read something like this:
All patient records, documents, reports, notes, forms, recordings and information are the exclusive property of Employer. All such documents and memoranda kept or made by Employee during the course of her employment and related directly or indirectly with the business of Employer or duties of Employee with Employer shall remain the property of Employer and shall be returned to Employer upon termination of this agreement for any reason.
While these provisions are entirely understandable and reasonable, they can always be made more favorable to the employee. Nurse practitioners and physician assistants often do not realize that they may require access to such documents and information following the term of their employment for a variety of reasons. For instance, if a malpractice claim arises, the provider will require certain documents in order to defend herself. For this reason, we always advise the inclusion of language that will specifically permit the employee’s access to employer’s medical records (following termination for any reason) in the event that the employee requires the documents to defend herself in any sort of case or proceeding where the documents are relevant.
Further, another important issue to consider is the documents and information that an employee might be working on pursuant to any research projects. Consider if you have an ongoing research project, and then your relationship with your employer turns sour. If employment is terminated and employer has retained its right to keep all documents and records as its exclusive property, then you may have no choice but to leave behind the research that you’ve been working so hard on. While this sounds nightmarish and certainly unfair, this might be exactly what the language of the employment contract dictates.
While the access to documents and information following employment is crucial, it is also important to address access to particular pieces of information during and throughout the employment relationship. In many cases, a provider’s compensation is partially or entirely comprised of productivity income (i.e. income that is dependent on the type and frequency of services provided). Additionally, the calculation of a provider’s income may take into account overhead and other expenses of the practice. In these cases, management or administrative staff will calculate the compensation due to the provider based on those services that she provided and any applicable deductions. Therefore, it is important for a provider relying on such calculations to be in a position to review the applicable information and ensure that her compensation is accurate. In these situations, we always advise the inclusion of language that will entitle the provider to reasonable access to financial and other information in order to verify the calculation of her compensation under the agreement.
9. Avoid Awkward Confrontation – Have Your Lawyer Handle It Instead!
For many, it is simply human nature to avoid confrontation. Particularly in an employment setting, individuals are more likely to let certain things slide rather than “ruffle feathers.” As touched upon earlier, this attitude, in conjunction with a mid-level provider’s desire to simply seal the deal and begin working, often results in a hastiness in signing the employment contract she is offered.
Upon receipt of your employment offer, any number of things may cross your mind.
I thought that my base compensation would be higher…
Why should I have to pay for my malpractice insurance tail coverage?
Are my call responsibilities reasonable and fair compared to the other providers?
Despite lingering concerns, you may feel pressure to simply accept the offer as is. Furthermore, you may have a feeling of guilt or unease with regard to requesting amendments to the agreement. After all, you do not want to appear greedy in the eyes of the person or entity that just offered you a job. As a result of these feelings, many providers sign the employment agreement they are offered without engaging in any negotiation at all. Without the representation of an attorney experienced in these matters, that may be exactly what you do.
If you hire an attorney to review your employment contract and negotiate it on your behalf, all of your unease will be erased. First, for any requested changes to the agreement, those requests will not be coming from you and you will not have to feel like the “bad guy” (even though you shouldn’t, anyway). Instead of saying, “I want to be paid more” you can say, “My attorney advised that the offered compensation is lower than the MGMA median data for my specialty, and I would like to explore ways to improve this.” Better yet, if you hire an attorney to do all negotiation on your behalf, you won’t have to say anything at all. Your attorney can handle the negotiations directly with employer’s legal counsel from start to finish, and you can sit back and relax until the agreement is ready for your signature.
10. Peace of Mind
Finally, we have arrived at our final reason why nurse practitioners and physician assistants should have their employment contracts reviewed by legal counsel – peace of mind.
Entering into a contract is always a serious step, no matter what the subject. Whether you are hiring a contractor to work on your home, or memorializing a multi-million-dollar business deal – the stakes are always high because you are legally binding yourself to an agreed-upon arrangement.
Employment agreements are no different. They are legally-binding contracts with far-reaching effects. Further, they are always written by attorneys representing the interests of the employer, rather than your own. The inevitable bias that always exists in the creation of an employment contract is reason enough to seek review by someone who is obligated to protect your interests.
There is a simple solution to alleviating that inevitable bias and diminishing mounting anxiety – hire an attorney whose only job is to represent and protect your interests. Achieve peace of mind knowing that you made the right decision and that all your bases are covered before taking the next step of your career.
The attorney-agents of Lauth O’Neill Physician Agency work exclusively on behalf of physicians, physician assistants and nurse practitioners. We offer a flat-rate contract review service, and also will negotiate your employment agreement on your behalf. Please reach out if you would like to learn more or have any questions about what we do!
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