The Importance of the Physician Employment Contract


“It is strongly recommended that the employer and the potential employee each retain an attorney to assist in evaluating and negotiating the employment contract.”

~American Medical Association~


Employment contracts are important for two key reasons.  First, they establish the legally enforceable expectations in the relationship between employer and employee and second, they set the tone of the employment relationship.  Engaging an attorney’s assistance in creating your employment contract will help you understand, craft, and experience a better employment relationship.

Whether you are an employer or employee, both parties should identify the financial and professional goals that are important to them.  There are many questions to consider.  If you are an employee, is an eventual partnership in the practice an option?  You will need to evaluate the growth potential for the practice, the payer mix, post-termination restrictions and other opportunities for your professional growth.  Each party will also need to consider the intangibles.  An employer might want to consider the physician’s credentials, personality, and manner of practice.  An employee on the other hand will want to consider geography, personalities of other physicians and the workplace atmosphere, economic prospects, and lifestyle.

An employment contract is legally binding and has the potential to last for several years.  An employee will need to evaluate any and all long term obligations they are about to enter into.  If any of the doctors (or many!) in the group are planning on retiring, will the rest of the physicians be obligated with a large buyout?  Are there other capital requirements on the horizon?  Facility upgrades, reorganizations, or legislative overhaul are good factors to consider as they can be high cost endeavors.  Engrav Law Office, on your behalf, will request background information such as corporate documents and financial statements, and speak to other physicians in the practice in order to determine financial viability of the employer and practice.

Other crucial factors to consider:

  • Restrictive Covenants
  • Scope of Physician’s Duties (Supervisory? Billing?)
  • Compensation method
  • Peer Review terms
  • Indemnification
  • Employee vs. Independent Contractor
  • Termination
  • Arbitration
  • Loyalty and Confidentiality Covenants

“The bottom line is that a physician should never hesitate to ask questions about—and seek to negotiate—the terms of an agreement.”  ~AMA~

Employment contracts offer certainty on a long term basis but it is crucial to conduct a thorough review and to have an expert assist you in the process.  To discuss review and or negotiation of your physician agreement, please contact Engrav Law Office.



AMA Annotated Model Physician Employment Agreement.