When a physician accepts a job offer, the employment agreement is more than a formality — it becomes the legal blueprint of your career. From salary structure to exit rights, each clause can profoundly affect your autonomy, stability, and financial future. That’s why even early in your career, it helps to have guidance from someone familiar with physician contracts — for example, Michael Johnson Legal LLC offers virtual evaluation and negotiation services for physicians nationwide. But regardless of whether you hire counsel, understanding your agreement is essential.
Here are key reasons why every doctor must become familiar with the terms of their employment agreement — and what to watch out for so you don’t find yourself trapped by overlooked details.
1. Your Work Obligations Shape Your Day-to-Day Life
An employment contract often sets expectations around how many clinical hours, call duties, administrative or teaching duties, and nonclinical time you must deliver. If the language is vague, your employer may interpret it more broadly than you intended. Always confirm that what’s written matches the verbal promises made during interview or negotiations: how many clinic days, what rotations, what amount of call coverage — and make sure the contract includes those specifics.
2. Compensation Is Multi-Dimensional and Complex
Salary is rarely the whole story. Many physician contracts include components like productivity incentives (e.g. wRVUs), bonuses, profit-sharing, or collection adjustments. If the agreement does not clearly define how performance incentives are calculated, how thresholds are met, or how adjustments (or clawbacks) will happen, you risk losing income you thought was guaranteed. Demand clarity in writing: the definitions, examples, caps, timing of payments, and rights of audit.
3. Exit Clauses and Termination Rights Can Have Big Consequences
Doctors may not think about leaving before they sign, but jobs change, life circumstances shift, and you need clarity. Agreements often include “termination for cause” vs. “without cause” provisions, required notice periods, transition duties, and restrictions after exit. Without clear exit terms, you might be forced to stay longer than desired or suffer penalties. Negotiate reasonable notice (often 60- to 180-day periods), define cause tightly, and ensure any post-termination obligations (like restrictive covenants) are fair and limited.
4. Noncompete, Non-solicit, and Restrictive Covenant Risks
Many contracts tie doctors’ mobility with noncompete or non-solicitation clauses. These may prevent you from working in a given radius or treating your own patients after leaving. If overly broad, such terms can severely limit your options. Push to narrow geographic scope, duration, and specialty restrictions. Also watch for clawbacks tied to leaving prematurely. A clause you accept today might block your freedom tomorrow.
5. Malpractice Tail and Liability Responsibilities
During employment, your employer often covers your malpractice insurance. But what happens after you leave? If your contract is silent on tail coverage (coverage for claims made after your departure for prior acts), you may be left paying tens of thousands of dollars. Make the contract explicitly state who bears the tail cost under different scenarios: resignation, termination, or nonrenewal.
6. Uncompensated Administrative or Additional Duties
Some agreements expect you to take on leadership, teaching, committee work, or administrative tasks in addition to clinical duties — without additional compensation. That dilutes your effective hourly rate and can lead to burnout. Ensure any nonclinical duties are defined and compensated, or limited in scope.
7. Lack of Market Benchmarking Weakens Negotiation
Without comparing your agreement to peer compensation and terms, you may be accepting a substandard deal without realizing it. Use national and specialty-specific benchmark data. Ask the employer for transparency or bring third-party data. Understanding what peers in your specialty are securing gives you leverage during negotiation.
8. Failing to Document and Update Promises
A verbal promise doesn’t hold up in court. If your employer makes amendments or concessions during negotiation, ensure every change is reflected in the final contract draft. Save email exchanges, offer letters, side letters, and negotiation notes. Review the final contract carefully to confirm it includes everything you discussed. If you rely on informal side agreements, you increase your risk.
Conclusion
Your employment agreement is the foundation of your professional life: it dictates how you work, how you get paid, and how you exit. For doctors, getting stuck with vague terms, unfair noncompetes, unclear incentives, or hidden obligations is a serious danger. By taking the time to read carefully, compare benchmark data, insist on clarity, and negotiate fair exit terms, you protect your autonomy, financial future, and peace of mind. Every physician deserves to understand their agreement before signing—only then can you walk confidently into your next role.
