Restricted Activities: How Does Your Physician Employment Agreement Restrict Your Behavior and Income?

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As a physician, when you are offered an employment agreement, you expect it to outline your role and responsibilities, and tell you how much you will be paid. What you may not expect is the many ways in which the agreement can restrict your behavior. Whether entering employment in a hospital or a private practice, it is a near certainty that your physician employment agreement will prohibit certain activities on your behalf, and also may restrict your rights and interests to property and income. Two common provisions of physician employment agreements are addressed below: outside professional activities and intellectual property.

Outside Activities

Physician participation in professional activities outside of the employment agreement is an issue addressed in almost every single agreement that we see. When a physician enters an employment arrangement, the employer often wants to ensure that the entirety of the physician’s professional time and focus is dedicated to the employer. While this is not terribly surprising or unreasonable, such provisions can have far-reaching effects.

There is a plethora of activities that are uniquely available to physicians as ways to earn additional income and expand their professional focus. These activities include moonlighting, researching, teaching, serving as an expert witness on legal matters and working as a consultant for drug or device companies. Depending on what your employment agreement states, you may be entirely restricted from engaging in these activities. Further, employment agreements sometimes take a somewhat deceitful approach by sneaking in language indicating that if you do engage in outside activities, any income you earn will be the employer’s property.

Close attention to the applicable language is necessary to determine what exactly the employer aims to restrict, and then to decide on an approach for negotiating any disagreeable language.

Intellectual Property

Somewhat of a less common issue in physician employment agreements concerns rights to intellectual property. Generally found in agreements with large hospitals and academic institutions, these provisions aim to assume ownership for any intellectual property that a physician develops during the term of his employment. The agreement will state that the Physician irrevocably assigns to the Employer all rights, title and interest in inventions, discoveries or patents that the physician develops. In other words, if you develop any money-making ideas while working for the employer, you may in fact have no rights to them. Such provisions sometimes even go further to extend beyond the term of the employment agreement, such that any intellectual property developed within x years of the Agreement is also assigned to the employer.

While this type of provision is not problematic for all physicians, those who are affected should be mindful. Is it conceivable that you will engage in developing intellectual property in the future? If so, what rights will the employer assume by virtue of your employment relationship?

Before signing an employment agreement, physicians should take the time to seek the advice and counsel of an attorney experienced in physician employment matters. To consult with an attorney-agent about your employment agreement, please contact Lauth O'Neill at (317) 979-4833 or loneill@lauthoneill.com.

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Physician Contract Review Tips: Intellectual Property

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In this next installment in our 2015 Physician Contract Review Tips series, we are discussing a subject closely related to our last article on Outside Income-Generating Activities. That article discussed physician employment agreement language that dictates whether the employed physician can participate in outside activities and retain the income therefrom.  In this article, we are focusing on intellectual property issues that surround certain work product that physician employees may create.  The range of focus on intellectual property rights in physician employment contracts spans from no mention at all, to sweeping, overly-broad language that leaves the physician employee with no rights or interest in his or her own intellectual property.  For many physicians, intellectual property issues may not be a hot button topic, but for those physicians who foresee participating in invention, innovation, consulting, and research work, any language in your agreement having to do with intellectual property can be hugely impactful.

It is crucial that physicians understand each and every term of their employment agreement to the fullest extent, and it is also of utmost importance that physicians never assume they will not, at some point down the road, become involved in activities that might result in work product that is protectable. For instance, while you may not foresee working with a device manufacturer in the future, you also might not be comfortable signing over to your employer, for free, all of your future ideas, inventions, patents, copyrights, trademarks and other protectable work product. Some physician employment agreements do in fact go so far as to provide that the physician employee is agreeing to hand over to their new employer, at no cost, or at only a very minimal cost, their entire inventory, current and future, of intellectual property.  As one can imagine, agreeing to language of this sort could end up costing the physician employee an enormous amount of money in the instance where a piece of intellectual property becomes valuable in the future.  The moral of this article, as is true with physician contract reviews in general, is to not sell yourself short. Especially if you are just coming out of training, you may be hesitant to negotiate away certain contract terms that will limit your rights and interests down the road, but do not assume that they will always be irrelevant to you. They may in fact one day be more lucrative than your basic compensation you earn from providing medical services.

For more information on physician contract review tips, please contact Leigh Ann at 317-989-4833 or loneill@lauthoneill.com.

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Physician Contract Review Tips: Outside Activities Income

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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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Physician Contract Review & Negotiation: Make the Money Useful

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If you're rounding out your physician job search and have been offered a physician employment contract, congratulations! At this time of year, many physicians are signing their physician employment agreements and looking forward to beginning work. Maybe you've had your physician contract reviewed by a physician lawyer, and you're confident that it's just the way you want it. Maybe you haven't taken the step of having a physician lawyer review your contract, but you'd still like some helpful tips anyway. One particular dilemma that especially comes to light this time of year is the "payment gap". You're finishing up your residency or fellowship, and you'll start your new job maybe sometime in August or September- maybe you're taking a few well-deserved weeks off before you begin. Well-deserved, they may be, but we all know they come at a price. Where is your income going to come from during your time off before you start your job?

If you enlist the help of a physician contract lawyer, they will likely readily assist you with this dilemma. While each and every physician employment contract is different and all circumstances and possible outcomes are unique, it may be possible to maneuver the salary offered to you to help you out as you finish up training. Even if you were not offered a signing bonus or moving expenses reimbursement, it may be possible to adjust your salary in such a way to offer you some initial compensation up front.

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How do you Gain from Lauth O'Neill Physician Agency?

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The answer is simple: We make our clients money, and we save our clients money. The physician job search process is certainly not a short or simple one. It takes months, and more typically, years to complete, and involves innumerable moving parts. The job search process requires extensive outreach efforts and marketing of a physician's credentials and qualifications. And once job offers are received, the physician employment contracts must be legally reviewed for costly and detrimental legal terms, and also negotiated to ensure the best offer is accepted. After all, the point of a physician job search is not to just find a job. The point of your physician job search is to find the best job for you- and the one that is most advantageous to you legally and financially.

In this series of articles, I will outline examples of ways Lauth O'Neill's professional services have added value to our physician clients. While every physician job search is unique and has its own unique outcome, all of the following are based on actual client experiences.

Lauth O'Neill Value-Added Example #1: A $75,000 increase in annual salary, in addition to a $50,000 signing bonus. How did we pull this off? We know how to gain leverage for our clients, and we know how to use it appropriately to negotiate better benefits.

Lauth O'Neill Value-Added Example #2: Amending insufficient medical malpractice coverage terms to avoid unquantifiable expense to our client. When a physician employment contract includes insufficient medical malpractice coverage, the consequence can be detrimental to the physician- not only expensive, but potentially career-ending. We understand the ins and outs of physician employment agreements, and know exactly what to look for to ensure that our clients are not stuck with unfavorable and harmful legal terms.

Check back here often or contact Leigh Ann directly for additional ways Lauth O'Neill Physician Agency provides value to its clients. Contact Leigh Ann at loneill@lauthoneill.com or 317-989-4833.

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Physician Employment Contracts: Medical Malpractice Provision Tips

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When a physician receives an employment contract, they are typically pretty savvy about knowing to look for the medical malpractice coverage provision to see if it provides them adequate coverage. In most employment agreements, the employer will cover the physician's medical malpractice coverage. Sometimes the cost of this coverage is taken out of the physician's practice income, and other times the coverage is provided at the expense of the employer, under a large umbrella policy like the ones hospitals and large practices have. While who ends up paying for the coverage is obviously important to the physician, there are issues of even greater import that should be more concerning to physicians. Most physicians have heard terms such as, "occurance-based," or "claims-made" and "tail coverage." But knowing which type of insurance is or is not included in your agreement, and what additional insurance you may need, is something best left to a physician contract lawyer to decipher. Without experience with medical malpractice coverage provisions, it is difficult to know with certainty whether the employment contract may leave you exposed. In addition to the type of insurance offered, and whether tail coverage may be needed, a separate issue that is often unknown to physicians are specific state law requirements that can have an enormous impact. For example, some states have patient compensation funds for which physicians may be eligible if their malpractice coverage is adequate. Such funds may provide additional coverage to physicians in instances where they are found liable in a malpractice lawsuit. Therefore, whether your employment contract complies with such state law provisions may have a significant impact on your potential exposure to medical malpractice liability. A thorough legal review of any physician employment agreement is crucial to ensure you are appropriately covered under the medical malpractice provision included in your contract. To learn more about physician contract legal review assistance, please click here to read about our Analyze & Shape service.

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Physician Employment Contracts: Termination Provision Tips

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One aspect of physician employment contracts that are often overlooked are the termination provisions. When physicians sign an employment agreement without having it reviewed by a health care lawyer, there is a good chance that the contact included unfavorable termination provisions. For instance, it is important for physicians to know how to protect themselves in instances where the employment arrangement terminates for some reason that is no fault of their own. Unfortunately, it is common for unfavorable contract terms, such as non-competition covenants, to continue to be enforceable despite the termination of the employment due to some fault of the employers. Many physicians find this possibility shocking, but this sort of language can be easily amended at the suggestion of a physician agent or physician health care attorney.

A second type of common and unfavorable termination provision is one that allows the employer to terminate the employment agreement without cause, even where no similar termination right is available to the physician. It is desirable for both parties to have a termination right that allows either party to terminate the agreement upon a breach by the other party of a material contract term and failure of the breaching party to cure the breach within a set number of days. A mutual term such as this is balanced and fair and is one example of the reasonable terms physicians want to negotiate into their employment agreements.

For more information on how we can assist physicians in negotiating their employment contract terms, please visit us at www.lauthoneill.com.

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Physician Contract Negotiation Tip #2: Know What You Want Out of Your Job

Many physicians, especially those fresh out of training, are hasty about accepting the first job offer that comes their way because they have enormous student loans to pay off, and they haven't yet endured a horrific employment experience that has taught them to tread carefully into any given employment arrangement.  After all, when you're out there looking for your first job, the potential employers are great salespeople- reassuring you that your wants and needs will be met. It's hard to make sure your wants and needs are going to be met when you're unsure about what they are exactly.  It is not uncommon for young physicians to feel that they don't have much wiggle room in terms of defining their employment arrangement.  To most, it seems as though you should just take what is offered, and don't rock the boat.  It is hard to know what you truly want from your employment when you've never been asked to define your ideal job.

But as a newly practicing physician, you have many more options than you think, and so it's important that you carefully consider what aspects of your employment are most important to you.  Maybe you have hundreds of thousands of dollars of student loans to pay off, so the highest salary possible, or even employer-funded repayment of the loans, is most important to you.  Or maybe you're into research, and so funding for your research work, and maybe even having one research day per week are important to you.  Or maybe you have a family, or want to have one soon, so a more flexible schedule is paramount to whatever salary is offered.  With employers growing more and more progressive in terms of flexible employment arrangements, it is important for physicians in their job search to carefully craft what their ideal employment opportunity will look like.  Knowing this crucial information up front will save you and your potential employer time and money down the road by ensuring that you will be happy in your employment arrangement, thereby limiting the possibility of needing to change jobs later.

Working with a physician agent in your job search process helps ensure that you have vetted all potential opportunities, and especially ensures that the employment arrangement you accept has been carefully shaped and molded to meet your needs and secure your financial and legal interests.  Contact Lauth O'Neill Physician Agency today to see how we can provide you valuable services, without you paying a dime until you start getting paid.  317-989-4833 or loneill@lauthoneill.com.

Physician Employment Contract Negotiation Tip #1: Know What You're Worth

If you're finishing up residency or fellowship, you've spent the last 4, 5, 6, 7, maybe even 8 years being paid about 18 cents per hour. Now you're out there looking for your first "real" job. So when someone comes along and offers you a 6-figure salary, it's tempting to accept it, no matter how unfair the offer actually is. Unfortunately, some employers are anxious to take advantage of young physicians who are desperate to take any job that will help them begin to pay off their enormous student loans. So many times young physicians wind up accepting compensation under their physician employment agreement that is not up to par with market standards. After all, it's hard to know what the market standard is when you don't have access to national physician compensation benchmark data. That is where a physician agent can help you. In providing our Premier Opportunity service to our clients, Lauth O'Neill utilizes our access to the MGMA and other important surveys to ensure that our clients receive the compensation and benefits they deserve. Before you accept a physician employment contract offer, be sure someone is looking out for your financial and legal interests.