Can You Break a Dentist Contract? | Dental Associate Contracts

Can a dentist break their employment contract? And the short answer is yes. However, if breaking the contract means breaching the contract and you’re not adhering to the contract terms. You are likely opening yourself up to liability for litigation or arbitration. Your employer can come and ask for damages related to recruitment costs to replace you, credentialing fees, administrative fees, and the list goes on from there. So, breaching your contract, if you’re going to break it, is not a great idea, and we never suggest that to our clients. A much better way to end your contract is in the termination clause that’s in typically every dental employment contract. Underneath the termination clause, there are typically three ways that you would adequately terminate the agreement.

3 Ways to Properly Terminate a Dental Contract

The first way is if you were to agree mutually. Hence, you and your employer agree to go your separate ways and terminate the employment agreement. However, this is rare; we don’t usually see this happen. The second way is for-cause termination. This clause is weighted towards the employer. In this type of clause in a contract, there would be an enumerated list of sorts of offenses that would occur, and they could terminate the agreement with the dentist immediately. 

Some examples of things on that list are if you lose your license to practice dentistry, lose a DEA license. You are not credentialed with insurance companies: Medicaid, Medicare, and the list. And then the third way and most common way that contracts are terminated is without-cause. Most contracts state that either party can terminate a contract for no cause, given a specific amount of notice to the other party. And typically, that’s between 60 to 90 days. So, if you provide your notice for 60 to 90 days, the contract is terminated, and you can go your separate ways.

Things to Consider Before Terminating a Dentist Contract

Another important thing is that if you decide to terminate your contract, you want to do it exactly how it’s written and give proper notice. There’s usually a notice clause within the contract that states if the termination letter needs to be hand-delivered, mailed, or in some cases, emailed, but that’s rare. That’s how you properly terminate a contract. And then the next thing I want to address is that you also need to read your contract to know what requirements you have once the termination process has started.

Specifically, suppose the employer gives you a signing bonus and covers relocation expenses. In that case, you’ll need to know if you must pay those back because some contracts have a certain amount of time, and if you terminate the contract within that period, you must pay those back. So, that’s something you want to consider. And then the last thing you want to think about when terminating a contract is malpractice, specifically tail insurance coverage. After leaving the employer, there would likely be a lapse in malpractice insurance, and that’s typically covered by tail insurance. Some contracts address the party responsible for providing it or reimbursing the other party for it. You will want to look at that in your contract and will likely be detailed in that process. 

Summary, Plus Restrictive Covenants

In summary, can you break a dental agreement contract? The answer is yes, but you don’t want to breach it. You wish to terminate it properly by looking at your signed agreement and doing it exactly how it’s written. And then, you also want to know any consequences that would likely incur, meaning paying back any of your signing bonuses. And, I did forget to mention that you also want to look at the restrictive covenants in your agreement. 

That’s non-compete clauses. How long is that for, what area is covered, and you want to ensure you’re not violating that. You also want to ensure that you’re not soliciting employees or patients, which is likely outlined in your agreement. Again, it’s always important to look at your actual dental employment agreement because it would probably have all these instances outlined in the contract on how to proceed.

Other Blogs of Interest

• Red Flags in a Dentist Employment Contract: Dental Employment Agreement Concerns
• How is a Dentist Given a Draw in a Contract?: Dental Contracts with a Draw
• Does a Dentist Have to Repay a Bonus if they Terminate the Contract?

Can you Break a Dental Associate Contract? | Employment Contracts

Can you break a dental associate contract? The most important thing is what you consider breaking a contract. In my mind, it could be two things, and the analysis of those two things is very different. First, breaking a contract could mean you have signed an employment agreement but have decided not to go through with it. And so, in that mind, I think that would be considered breaking the contract. And then the second one would be, you’re in a current agreement, and you want to get out of it, is that considered breaking a contract? The first one, yes, I would consider breaking a contract. The second one is just terminating the agreement, probably not breaking the contract.

Not Interested in Continuing the Practice

Let’s take, for instance, you’ve signed an agreement and don’t want to go through with the job. In that scenario, let’s say you’re in your last year of training. You’ve been approached by practice, and they say, hey, we’d like you to come in, be a dental associate, you negotiate, sign the agreement. Then something happens, or you don’t want to go through with it. It could be a family issue, could be a better job opportunity. 

Several things could make someone not want to go through with it, but how do you handle that scenario? Well, one, it may be stated in the agreement that if the dental associate doesn’t start, these are the consequences, and it could be a penalty. They may say there are liquidated damages like a monetary amount you must pay because you’re not going to start. It could come after you for recruitment fees or any credentialing fees they’ve paid to get credentialed if they assisted in your licensure. Or any of those types of things. Breaking the contract, meaning deciding not to start, could open the dental associate to liability. 

Reasons Why Some Employers May Be Forgiving About Breaking a Contract

Now, I find most employers reasonably understand for a couple of reasons. If somebody doesn’t want to be there, they don’t want to force someone to start or make a big stink about them not coming. Now, the more extended notice you can provide the employer, the more likely it is that it can be a peaceful break. If you have an employment contract and you’re supposed to start on July 1st and on June 30th, you say, oh, by the way, I can’t begin to. Well, that employer is going to be angry. They may come after you for minor damage unless there’s an excellent excuse. 

And when I say come after you, they could sue you, or if there’s an arbitration clause, they could go to arbitration. If you have more notice, you need to come to the employer and say, look, the situation has changed. I apologize for backing out. Due to these reasons, I can’t start. I appreciate all that you’ve done for me. I was looking forward to starting here, but I’m trying to give you as much notice, you can find someone to replace me. In that scenario, most employers will be understanding and won’t make a big deal out of it. That’s breaking the contract if you’ve signed it and don’t want to start.

4 Ways You Can Terminate Contracts

I don’t consider breaking the contract if you’re in a current employment agreement and want to get out of it. There will be a language in the agreement that states how to get out of the term. There are four ways to terminate a contract.

Fixed Term and Mutual Agreement

One, there could be a fixed term, meaning how long the contract is. There’s no language about renewing, meaning there’s no automatic renewal language in the agreement. The term ends, neither party wants to continue it, the contract is made, and the contract terminates. You could terminate a contract by mutual agreement, meaning, both parties say, you know what, this isn’t working out. We can both get out of it, no harm. That’s it.

With Cause Termination

The other one would be a breach of contract. If one of the parties is breaching the contract, let’s say the employer isn’t paying on time or there’s a bonus structure. They’re not paying the dental associate the proper amount. In that scenario, the dental associate would provide written notice to the employer saying you’re in breach of contract. Usually, they’d have a short period to fix the breach, a cure, somewhere between 15 to 30 days. And then, if they did fix it in that period. The contract couldn’t be terminated for-cause. 

Without Cause Termination

The last way, and usually the most, I guess, a common practice for a contract to be terminated is called without-cause termination. Without-cause termination, and this is probably what some people may think is breaking a contract. It means any party can terminate the agreement at any time, for any reason, with a certain amount of notice to the other party. For most dental associate contracts, that’ll be somewhere between 30 to 90 days. And in that scenario, if the dental associate wanted to terminate the agreement, they would give the employer proper notice in writing.

If it was 60 days, they give them 60 days’ notice; they say, per the agreement, here’s my 60 days’ notice, my last day of work will be this, appreciate the opportunity. And that’s it. I guess the only way you could break the contract, meaning be in breach of contract, would be if you gave notice, but it wasn’t enough. If the contract said 60 days and you only gave 30, they could come after you for damages like lost profits, replacement, recruiting fees, etc. And then sometimes, in the agreement, it’ll state if the dental associate leaves at a specific time. In that case, they’ll have to pay back signing bonuses, relocation assistance, credentialing, licensing, and all those fees. 

Tip From Dental Associate Contract Lawyers

So, can you break a contract? Yes, you can break a contract, but there will be repercussions. But for the most part, if your contract has without-cause termination, it gives you options to get out of the agreement at any time. And if you have a contract that doesn’t have without-cause termination, do not sign that contract. It is an enormous red flag. Usually, that means employers have a challenging time retaining dental associates. And so, they’re trying to ensure they can’t leave within a certain period. You do not want to be in that position.

How to Negotiate a Dental Associate Contract | Employment Agreement 

How should you negotiate a dental associate contract? I will give some tips and tricks to get a better associate contract. First, there is a difference between negotiating an associate contract with somebody just coming out of training. And someone who’s been established in a community for a while. You have more leverage if you are in any community classification. A corporate practice or another group is bringing out your practice and wants you to join them. You have an established employee or client base. Let’s first talk about those coming out of dental training. 

What Are the Important Outlines of a Dental Associate Contract?

What do you need to do to put yourself in the best position to negotiate a contract? Well, you need to know what’s important. For most dentists, the most important things are compensation. Is it a base salary? Is it a daily rate? Or is it a net collection? How do you terminate the contract? Can you get out of it with a certain amount of notice or the benefits? Do they pay for your license, DEA registration, credentialing, or continuing education, and are they signing bonuses and relocation assistance? 

Do you have to pay them back if you leave within a particular time? And then probably the two highest priorities are who pays for dental malpractice insurance. Who must pay for tail insurance after the contract terminates if it’s a claims-made policy and the non-compete? This is some people’s absolute, most important thing in the contract. Suppose that the community tied them up, kids in school, family. In that case, they absolutely can’t leave, then you need a reasonable non-compete that’s not going to make you must move entirely out of the area.

What Are the Reasonable Outlines of a Contract for New Graduates?

Alright, those are the most important things to dental associates. Now, you’re coming on training. You have a job offer. They’re giving you a certain amount. How do you know what’s reasonable and what’s not? Well, talking to your classmates is the best way to find that information. What are the offers they’re getting? How much are they getting? How are they structured? Where is the job offers to originate? That’s the best and most, I would say, accurate means of finding out what the going rate is at that time. The compensation is going to vary wildly. As I said before, is it a base salary? It is at a daily rate. Is there some net collection involved? Is it a hybrid? Could it be half base, half net-collections?

 Many times, compensation for a job may look great. Still, the benefits are inadequate, they’re not paying for your tail insurance, or the non-compete is terrible. So, you can’t just take compensation as the number one factor in determining a good opportunity, but it is undoubtedly essential. Knowing whether a non-compete is fair or not is something you probably must consult a lawyer. For the most part, anywhere between one to two years and then maybe 5 to 15 miles from your primary practice location would be reasonable. If you’re in a non-compete that’s more than two years, it knocks out like multiple counties. And maybe they’ve attached the non-compete radius to, let’s say, a corporate practice in a big city, and they have 10 locations. And they’re saying, well, you can’t work within 10 miles of every place we own. That’s not a reasonable non-compete. 

What Happens if the Employer Provides You With an Offer Letter?

The actual negotiation will depend on two. One, do they give you an offer letter, or do they give you the employment agreement? If they give you an offer letter, they expect that those terms will be negotiated in advance and then incorporated into the employment agreement. And then, they’re going to give you the employment agreement. I find it challenging to come to terms with the main parts of an offer letter without seeing the entire employment agreement. If I had a perfect scenario, there would be no offer letter. They would give the employment agreement. Then you’d completely understand what the job entails and the expectations for both parties.

You could agree to a salary, to the length of the term, that there is a non-compete, that the things they’ll purchase with the money. On the contrary, when you see the specific language in the contract, it could significantly change how you look at the value of the contract. Just because you’ve signed an offer letter doesn’t mean you can’t renegotiate those terms if you provide proper context to the employer. Alright, I was okay with making $110,000 a year and base salary, not knowing that the non-compete effectively knocks me out of the entire state. If you want me to sign this contract with that non-compete, I need 130,000. There are many ways of going back and forth. Some employers will simply say, this is a take-it or leave-it.

Advice From a Lawyer Regarding the Employer

I would be wary of signing a contract with an organization unwilling to make any changes in the contract. It usually means they’re difficult to work with down the road or have a very rigid and unprofessional environment. So, if you find that someone says, take it or leave it, I would leave it and move on and try to find a better opportunity. If they think they will not change anything in the contract, I’m just telling you that there will be no change in signing bonus, relocation assistance, benefits, or anything like that. It is a lousy sign moving forward. 

What if a Contract Does Not Have a Without-Cause Termination?

And then one more thing to think about and absolutely should be top of mind when you’re signing a contract or negotiating the terms of an agreement. Every employment contract should have what’s called without-cause termination. Either party should be able to terminate the agreement at any time with a certain amount of notice to the other party—usually, somewhere between 30 to 90 days. Suppose your contract does not have without-cause termination. As a result, you must fulfill the entire initial term of the agreement somewhere between one to three years. Usually, it is an enormous red flag. 

You absolutely should not sign that contract for this reason. Suppose they have been excluded without-cause termination, which is standard across all healthcare professions. In that case, it usually means they’ve had a ton of turnover or some very dissatisfied dentists wanting to leave. So, they’ve removed that ability and ensured they must stay there for three or more years. If it’s not in the contract, it’s typically not in there because they’ve had a ton of turnover, which is usually due to bad management. It’s either a toxic work environment or the compensation is not worth the time or effort you’ve put into it. It makes sense there’s always without-cause termination in the employment agreement. 

Lawyer’s Advice About Negotiating Dental Associate Contract

Don’t feel bad about asking for things. If you’re negotiating the terms of employment, most smart employers expect there will be some back and forth. Ask for a little more salary, a little more bonus, and a little less non-compete radius. The incremental things you can get changed in the agreement can significantly change the value of an opportunity. So, don’t feel bad. Now, if they’re offering a hundred and you ask for 300 or some crazy amount, they will think you have no idea what’s happening. They’ll probably move on. 

When you ask for something, it needs to be reasonable. How do you find out what’s valid or not? Talk to your classmates, talk to any mentors, and speak to attorneys who understand what they’re doing. And then deal with these contracts every day. That’s where you need to get in. But if you go in and ask for these ridiculous changes to an agreement, most places will pull the offer to say, no, we’re not doing any of that. So, that’s how you negotiate a dental associate contract.