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In this installment in our Physician Contract Review Tips Series, we are addressing a type of provision that is included in nearly all physician employment contracts: the ability of the physician employee to participate in income-generating activities outside of the employment arrangement. This type of provision is important to those physicians who may wish to engage in activities such as, but not limited to, consulting, research, teaching, speaking, and even expert testimony outside of their employment agreement (hereinafter, "Outside Activities"). In the minority of physician employment agreements, this issue will go unmentioned, which may leave the physician employee open to participating in such Outside Activities. However, in the majority of physician employment contracts, there will be a provision that limits the physician employee in one way or another. In some cases, the agreement will stipulate that the physician cannot participate in any Outside Activities without the prior written consent of the employer. Additionally, the provision may state that any income earned from Outside Activities, unless otherwise prior agreed to, will become the property of the employer. In other instances, physician employment agreements will flatly prohibit the physician employee from participating in any Outside Activities whatsoever. Finally, in a third of various other possible scenarios, the physician employment contract might state that the physician employee may participate in certain Outside Activities, but all income earned by the Physician must be turned over to the employer.
As with nearly all physician employment contract provisions, the language addressing participation in and income earned from Outside Activities is typically negotiable. In some cases, we are able to narrow the restrictions initially set out in the agreement, or can carve out certain activities our client is interested in pursuing. Of course we always aim to amend agreements such that our clients can keep for themselves any income they earn.
For more information on how we can assist you with your physician job search or contract review, please call Leigh Ann at 317-989-4833 or email at loneill@lauthoneill.com.
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