Dental Associate Contract Red Flags | Dentist Employment Contract

Dental associate contract red flags. There are dozens of red flags in a contract. However, a handful is necessary to take a solid look at, and we’ll go over those. In any employment contract, the first thing would be no without cause termination. There will be a term that states how long the contract is. Then termination, how the contract terminates. There are several ways to terminate a contract. The term could end, and it’s not renewed. It may terminate through mutual agreement. It may also terminate for cause. If one of the parties breaches the contract, it doesn’t fix the breach. The other party generally has the option to terminate the contract immediately. And then the last and most important way is without-cause termination.

This means that either party can terminate the agreement at any time with a certain amount of notice. Normally, it takes somewhere between 30 to 90 days. This is important, and I find this especially important for dental associates for whatever reason. Without the ability to terminate the contract at any time, let’s say the dental associate has a two-year contract, and they cannot terminate without cause, you’re essentially stuck there for two years unless the other party breaches the contract.

Employment Red Flags: Net Collections and Long Notice Period

There are plenty of scenarios where a dentist associate is on net collections, volume, and compensation. The owner will generally, I’d say, overestimate what the associate will make. And so, they can get a job if they don’t receive payment on a daily rate salary. It’s more of eating what you kill and getting a percentage of whatever is collected. The volume isn’t there, and you’re not making nearly as much as you expected.

You still would have to play out the rest of those two years. And that is a situation no one wants to be in. So, the first thing is to make certain there’s without cause termination at any time. Sometimes, the employer will try to say. You can’t give notice in the first year. Or you can’t give notice in the first six months or whatever. No, anytime, if you start, you give information, you do your, whatever the notice period is, move on. The second is compensation. Suppose you are a dentist and receive a salary on either net-collections. In that case, encounter some volume metric, and you are not 100% certain that the volume is there for you. It would help if you were very careful about taking that job. 

Dental Associate/Contractor Compensation

A daily rate or a base salary, especially in the first year or two. Insulates the dental associate from just getting completely screwed by an employer. That is, unwilling to make an income guarantee and bring in a dentist. But in that circumstance, only pay them based upon volume metric. Like in the example I gave, if a dentist starts and their compensation is based purely on production and the production is completely out of their hands, they’re not doing the marketing. It is on the employer to drive the business. It’s a problem.

So, it’s important to have a guaranteed salary or daily rate for anyone who’s new, maybe just out of training or relatively new. And then once you’re there, maybe you’ve been there a year or two. You see that the volume is there. Maybe potentially, you can make more under the collections model. Well then, talk to the owner about switching. But at the very beginning, I find that most places try to lure dental associates in with big numbers. It seldom shakes out that way. Another big red flag is the non-compete. This is one thing that varies from state to state. Each state has its view on what’s a reasonable non-compete.

Dental Contracts and Non-Competes

Non-competes are enforceable in almost every state. Such as California, New Mexico, and Massachusetts. Those are three of the few states where they’re completely unenforceable.

Most states, it must be a reasonable length, usually about 12 months. Sometimes they’ll try to do some reasonable geographic restrictions for two years. It is usually somewhere between 5 to 15 miles. If you have a five-year, 50-mile non-compete. You don’t want to sign something like that. You want it to be no more than a year and then no more. I prefer 10 miles from your primary practice location. Many of these big corporate dental offices have multiple locations in the area. They will state it’s 10 miles or whatever the geographic restriction is from every place they own, even if the dental associate didn’t provide care or work in that location. No, you can’t agree with that. It needs to state that it will only apply to the locations where the dentist provided care. And even then, try to limit it to no more than two locations. 

In big cities, corporate dental conglomerates obviously continue to gobble up some dentist-owned practices. And so, if someone is 10 locations in a city and it’s 10 miles from 10 locations. You’re going to leave your city. So, what’s in the non-compete is certainly important. Lastly, I’ll touch on the benefits briefly. The employer should pay for your license, DEA registration, and continuing education if a dental associate is an employee. Suppose you’re moving from out of state. In that case, reasonable moving expenses and reimbursement are normal things an employer should pay for. So, think about that as well.

How to Negotiate a Dental Associate Contract? 

I will give some tips and tricks to get a better contract in contract negotiation. Contract negotiation differs between someone fresh from training versus someone who has a reputation in a community. You have more leverage if you’re in any community and corporate practice. Or another group is bringing out your practice and wants you to join them. And you have an established patient base. Let’s first talk about those coming out of training. 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, and continuing education, and are there signing bonuses and relocation assistance? Do you have to pay them back if you leave within a certain time?

Probably the main priorities are who pays for malpractice insurance and who must pay for tail insurance after the contract terminates. Suppose it’s a claims-made policy and the non-compete. This is the absolute, most important thing in the contract for some people. Suppose built connection to a community, kids in school, family. In that case, they absolutely can’t leave. Then you need a reasonable non-compete that won’t make you move completely out of the area.

How to Determine if an Offer is Reasonable?

Alright, those are the most important things to dental associates. Now, you’re coming to 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 do job offers come from? That’s the best and most accurate means of determining the going rate at that time. The compensation is going to vary wildly. As I said before, is it a base salary? Is it at a daily rate? Is there some net collection involved? Or 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 bad, 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 certainly important. Knowing whether a non-compete is fair or not is something you probably must talk to a professional about. For the most part, anywhere between one to two years, and then maybe 5 to 15 miles from your primary practice location would be considered reasonable. If you’re in a non-compete, that’s more than two years, or it knocks out like multiple counties. Or maybe they’ve attached the non-compete radius. Let’s say it’s a corporate practice in a big city, and they have 10 locations.

Renegotiating the Employment Agreement

And they’re saying, well, you can’t work within 10 miles of every location we own. That’s not a reasonable non-compete. The actual negotiation will depend on two things. One, do they give you an offer letter, or do they give you the dental contract? If they give you an offer letter, they expect to negotiate the terms in advance. And they are then incorporated into the employment agreement. And then, they’re going to give you the employment agreement. I find it difficult to come to terms with the main parts of an offer letter without seeing the full employment agreement. If I had a perfect scenario, there would be no offer letter. They would give the employment agreement. Then you’d have a full understanding of what the job entails and the expectations for both parties.

You could agree to a salary. You could agree to the length of the term, that there is a non-compete, that the things they’ll pay. But when you see the specific language in the contract. It could greatly 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. I was okay with making $110,000 a year and a base salary, unaware that the non-compete effectively knocked 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. I would be wary of signing a contract with an organization unwilling to make any changes in the contract.

Red Flag for Prohibited Contract Revision

It usually means they’re difficult to work with down the road or in a very rigid and unprofessional environment. So, if you find that someone just says, take it or leave it, I would leave it and move on and try to find a better opportunity. I’m just telling you if they take the mindset that they won’t change anything in the contract. Like nothing at all, no change at signing bonus, relocation assistance, benefits, anything like that, it is a bad sign moving forward. 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. If your contract does not have without cause termination. This means you must fulfill the entire initial term of the agreement somewhere between one to three years. Normally, it is an enormous red flag. You absolutely should not sign that contract for this reason. If they have excluded without cause termination, which is essentially standard across all healthcare professions. 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 made sure they must stay there for three years or two years. If it’s not in the contract, that’s why it’s normally not in there. Because they’ve had a ton of turnover, which is normally due to bad management. It’s either a toxic work environment, or the compensation is not worth the time or effort you’ve had to put into it.

The Need for No-Cause Termination Agreements

It makes sense there’s always without cause for termination and the employment agreement. 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. Like incremental things that you can get changed in the agreement can make a big change in 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’re going to 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 reasonable or not? Once again, talk to your classmates, any mentors, and attorneys who understand what they’re doing. And 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 that. So, that’s how you negotiate a dental associate contract.

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How to Get Out of a Dental Associate Contract? | Employment Agreement

How to get out of a dental associate contract? You will sign one of two contracts when you are a dental associate. It’s either a dental employment contractor or an independent contractor agreement. Ultimately, it’s the same way of terminating the dental employment contract agreement. Still, I’m going to talk specifically about dental employment contracts because those are, I’d say, the standard type of dental associate agreement to sign. 

Are Contractual Provisions For Length and Termination Present?

When the contract is signed, there will be language in the contract that states its term. So, how long it lasts and then termination means how either party can terminate the agreement. As far as the term is concerned, usually, it will be one of two things.

There is a fixed term with automatic renewals. It could be like a one-year term, which automatically renews for one year unless terminated. More often, there have been evergreen contracts where no term is listed. It just states the contract continues until someone ends it. One is not better than the other. It’s ultimately the same result. After you find out what the term is, go to the section about termination. The ways to terminate a contract are one, by mutual agreement. If both parties feel like it’s not working out, they don’t need or require a certain amount of notice. They just say, alright, this doesn’t work out. We’re both going to wash our hands of this and move on.

With Cause Termination

Two, if there was a fixed term, let’s just say it was one year, and there was no language about automatic renewal. If the one-year term expires and neither party decides to renew, it might terminate the contract. That’s it. Cause-termination is another type of termination. Suppose one party is in breach of contract. In that case, there’ll be language that states the party who thinks that the other party is in breach has to give them written formal notice that says, you’re in breach of contract due to this. And then, typically, there would be a language called a cure period. And the cure gives the party breaching the contract a period to fix whatever the problems are. Usually, it’s somewhere between 15 to 30 days. 

In this scenario, let’s say the dental office is not paying a bonus they said they would, or it’s not timely. Whatever the issue, the dental associate would send them a letter saying, “We agreed that you would pay me this amount of bonus, but you haven’t paid this.” You are in breach of contract, you have 15 days to fix the breach, or I have the option of terminating the contract immediately. That’s one way to get out of the contract.

Without Cause Termination

The last and most frequent way is through without-cause termination. Every contract agreement a dental associate sign needs to have without-cause termination. And that means either party can terminate the agreement at any time with a certain amount of notice. Why is this important? I find this, especially in the dental industry. The volume/if compensation tied to collections can be puffed up before the dentist starts. So, they might get into a situation where they’re being paid purely on production. The volume isn’t there, or they’re making nothing. And then they’re stuck in a contract if there’s no without-cause termination language.

So, what you want is somewhere between 30 to 90 days for without-cause termination notice. The way that would work is just like if someone is in breach. The dentist will then state in the written letters that I’m terminating the agreement, per without-cause termination. That is the most typical method of terminating a dental associate agreement. My last day at work will be X date. I must appreciate the opportunity. The same goes for them as well. If maybe they don’t think it’s working out with the dentist, they can give them notice. Then they can make the dentist work out whatever the notice period is, or sometimes they can just tell them, look, go home, or we don’t need you anymore.

How to Negotiate a Dental Associate Contract | Dentist Employment and Dental Negotiations

How should you negotiate an associate contract? I’ll give some tips and tricks to get a better contract. There’s a difference between negotiating a contract with somebody just out of training versus someone already established in a community. You have more leverage if either a corporate practice or another group is bringing out your practice. Or wants you to join them. And you have an established patient base. Suppose you’re coming out of training. What do you need to do to put yourself in the best position to negotiate a contract? 

For most dentists, the most important things are salary. Is it a base salary? A daily rate? 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? Are they paying for your license, DEA registration, credentialing, or continuing education, and are there signing bonuses and relocation assistance? Will you be paying them back if you leave within a certain time? Probably the two highest priorities are: who’s paying malpractice insurance? And who must be paying for tail insurance after the contract terminates if it’s a claims-made policy. 

Also the non-compete. This is some people’s absolute, most important thing in the contract. If they’re tied to a community, kids in school, or family, they absolutely can’t leave. Then you need a reasonable non-compete that’s not going to make you move entirely out of the area.

Know The Average Pay in Practice

Those are the most important things to dental associates. Now, you’re coming on training, you have a position offer, they’re giving you a certain financial amount. How do you know what’s reasonable? Talking to your classmates is the best way to find that information. What offers are they getting? How much are they getting and how are they structured? Where do offers come from? That’s the best and most accurate means of finding out what the going rate is at that time. The compensation is going to vary wildly. Is it a base salary? Is it a daily rate? Or is there some net collection involved? Or is it a hybrid? And could it be half base, half net-collections. 

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

Alright, those are the things that are most important to most 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, the best place to find out that information is to talk to your classmates. What are the offers they’re getting? How much are they getting? How are they structured? Where are the job offers coming from? 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? Is at a daily rate. Is there some kind of net collection involved? Or is it a hybrid? Could it be half base, half net collections? 

Other Things to Consider Beyond Compensation

Often, dental compensation for a job may look great, but the benefits are inadequate. They’re not paying for your tail insurance, or the non-compete is terrible. So, you can’t just take a salary as the number one factor in determining a good opportunity. But it’s undoubtedly vital. Knowing whether a non-compete is fair or not is something you probably must talk to a professional about.

Mostly, anywhere between one to two years and 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, or it knocks out like multiple counties. Or maybe they’ve attached the non-compete radius to 10 locations. Say, it’s a corporate practice in a big city having 10 locations. And they’re saying, well, you can’t work within 10 miles of every site we own. That’s not a reasonable non-compete.

The actual negotiation will depend on two things. 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 those terms will be negotiated in advance. Then incorporated into the employment agreement. And then, they’re going to give you the employment agreement. Sometimes it’s challenging coming to terms with the main parts of an offer letter without seeing the full 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 work entails and the expectations for both parties. You could agree to a salary, the length of term, that there’s a non-compete, that’s the things they’ll pay for. But when you see the specific language in the contract, it could significantly change the way you look at its value.

You Can Negotiate The Contract Even After Signing the Offer Letter

Just because you’ve signed an offer letter doesn’t mean you can’t renegotiate if you provide proper context to the employer. Alright, I was okay with making $110,000 a year and a base salary. Not knowing the non-compete effectively knocks me out of this state. If you want me to sign this dental contract with that non-compete, I need 130,000. There are many ways of going back and forth. Some employers will just say, this is a take-it or leave-it. I would be wary of signing a contract with an organization unwilling to make any changes in the agreement.

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. I’m just telling you. If they take the mindset that they’re not going to change anything in the contract, like nothing at all. No change at signing bonus, relocation assistance, benefits, anything like that. It is a bad sign moving forward. 

Top Tip: Check the Without Cause Termination

One more thing to keep in mind when signing a dental 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. Usually, somewhere between 30 to 90 days.

If your contract doesn’t have without-cause termination. It means you must fulfill the entire initial term of the agreement somewhere between one to three years. Normally, it is an enormous red flag. You absolutely should not sign that contract for this reason. Suppose they have 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 very dissatisfied dentists who wanted to leave. So, they’ve removed that ability and made sure they must stay there for three years, two years, etc. 

Usually, it’s not in the contract because they’ve had a ton of turnover and it’s normally due to bad management. Either it’s a toxic work environment. Or the compensation is not worth the amount of period or effort you’ve, you’ve had to put into it. It makes sense that there’s always without-cause termination in the employment agreement. 

Talk to Dental Associate Contract Lawyers

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. Incremental things you can get changed in the agreement can make a big change in 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’ll think you have no idea what’s going on. They’ll probably move on. When you ask for something, it needs to be reasonable. How do you find out what’s reasonable or not? Once again, talk to your classmates, any mentors, or attorneys who understand what they’re doing. Those dealing with these contracts every day. That’s where you need to get in. But if you ask for these ridiculous changes to an agreement, most places will pull the offer and say no. So, that’s how you negotiate an associate contract.

What You Need to Know about a Dental Associate Employment Agreement 

Dental associate employment agreements are important legal documents for both the dental professional and the employer. Signing such a contract means you understand what is expected of you and your employer moving forward. 

Suppose you’re a dental associate about to join employment. In that case, you may wonder what to look for in your employment contract. What benefits should the employer provide? Can you cancel your contract at any time? And are there drawbacks to signing such a contract? Here’s everything you need to know about the dental associate employment agreement. 

What is a Dental Associate Employment Agreement? 

The dental associate employment agreement is a contract between the dentist’s employer (practice owner) and an employee (dental associate) that sets out the terms and conditions of employment.  

The agreement specifies the services to be provided, the duration of employment, and other relevant details that should guide both the dental associate and the practice owner on how to work together.  

It is vital to have a dental contract lawyer review your employment agreement before signing it. This way, you can be sure that the contract is as fair and reasonable to you as it is to your employer. 

What To Look Out For in a Dental Associate Employment Agreement | Contracts

When signing a dental associate employment agreement, it’s important to ensure the following terms are present and well explained: 

Term Length 

The contract should specify the start and end dates of the employment so as to determine the length of the term. It also should outline any conditions that need to be fulfilled before the start date, such as acquiring a license in the practicing state. 

Expiration 

The contract expiration date should be included, after which the terms of employment will need to be renewed either automatically or manually.  

Alternatively, the agreement may state that the contract will continue until either party terminates it. So be sure to check which applies to your situation and have it stated clearly in the contract to avoid issues. For instance, having to wait for a certain period to be able to renew your contract.  

Duties and Responsibilities 

What exactly are you being employed to do? Your contract should outline your daily duties and responsibilities in detail. It should also specify the working hours, days, and location. 

It should also clearly state if the required hours will be counted for your clinical duties. Or will you also include other administrative and marketing duties you may be required to do?

Understanding your duties and responsibilities ensures there’s no confusion about what’s expected of you, and you can’t be held accountable for something that wasn’t part of your job description. 

Benefits 

The contract should also specify the benefits that the employer will provide, such as paid time off, health insurance, continuing education reimbursement, and retirement savings plans. 

Benefits play a big role in your overall compensation; therefore, if you’re not happy with what’s being offered, be sure to bring it up and negotiate for a better benefits package. 

Non-competes 

Some employers may include a clause in the contract that prohibits you from working for a competitor during and after your employment for a specific geographical area and time period.  

If such a clause is included in your contract, ensure you’re comfortable with it, as it can hinder you from finding a job if you leave the practice. If you’ll be working in a densely populated area, a radius of 2-15 miles is fair and reasonable. 

Dispute Resolution 

The contract should specify how you and your employer will resolve disagreements. Arbitration or mediation, which are alternatives to court, may be included. The contract should include this section, so you know what to expect if there is a disagreement.

Contract Termination 

Who can terminate the contract? How much notice should be given? Are there repercussions thereafter? Your contract should address these questions as well as specify the conditions under which the agreement can be terminated, for example, due to breach of contract. If the provisions are not specific, for instance, such as “the associates disobey the employer” or “the employer is not happy with the work,” then the contract may be terminated for any reason. 

Note that there’s a difference between the termination of employment and the termination of a contract. Unless the agreement is terminated, you may be entitled to some provisions even after your employment is terminated. So, check the wording. Also, make certain that you are not signing an independent contractor agreement, as this is a different employment relationship.

Payment Terms 

How and when you will be paid? What is the salary or hourly rate? Are you eligible for overtime pay, and how will it be calculated? Which compensation model will be used? These are the questions that your contract should be able to answer. It should clearly lay out the payment models and all the terms involved. This part of the agreement is very important to you, and you should therefore pay close attention to it. After all, you’re working to make a living. 

Professional Liability Insurance 

Every dental associate should have liability insurance. Such insurance is meant to financially protect you in the event that a patient sues you for malpractice. Some employers will require you to get your own policy, while some will include it in the contract. If the employer is including it in the contract, make sure you understand what is and isn’t covered. You don’t want to be caught up in surprise later on. 

About to Sign a Dental Employment Contract? 

Dental associate employment agreements are important documents that specify the terms of your employment. Be sure to read them carefully and understand all the clauses before signing. And if you’re not happy with the terms of the contract, don’t be afraid to negotiate. After all, it’s your career. You want to make sure you’re protected. The best way to ensure you get the best outcome is by involving a knowledgeable dental contract lawyer to review your agreement. Our attorneys are available to do so. We has the experience and skills needed to help you. Reach out to us today.