Dentist Contract Lawyer | Attorney Review of Dental Contract | Dentists
Chelle Law provides Dentist Contract Review for dentists entertaining a new dental job (in a new state) or renegotiating an existing dental contract. You have worked hard to develop your skills and deserve to advance in your professional career with a fair market value dental agreement based on equitable terms. So, when you are about to enter into a dental contract, getting dental covenants reviewed before signing with a new business is vitally important.
The terms of dental covenants will impact your load of patients, practice setting and your day-to-day life. Attorney Robert Chelle reviews your dental contract’s content, identify the areas that could be improved and assist you in obtaining the best dental contract possible. Each provider that requests Mr. Chelle’s assistance with dental agreement analysis receives:
- Available in any state
- Flat-rate pricing, with no hidden costs
- Review of your proposed dental agreement
- Phone consultation with Attorney Robert Chelle reviewing the dentistry contract term by term
- Follow up with a summary of the needed clarifications
These touchstones are even more crucial when applying their roles to the case of a dentist employed by a dental group, or other dental provider. The present day conclusion is simple: A dentist should not sign dentistry contracts in any state without having the content of the dental agreement reviewed by legal counsel. For instance, to ensure ADA compliance, associate compensation, disability insurance, student loans, malpractice, associate training, member marketing guidance, etc.
Dentist Contract Checklist Reviews and Legal Information
Each dentists’ contract is unique. However, nearly every dental contract for dentistry professionals should contain several essential terms regardless of what state it is in. If these essential terms are not spelled out in the dental employment agreement, disputes can arise based on disagreements between the employer and employee as to the details of the specific term.
For instance, if the DDS or DMD is expecting to work at the practice Monday through Thursday and the employer is expecting the provider to work Monday through Friday, but the specific workdays are absent from the Dentistry Agreement; who prevails? Spelling out the details of your job is crucial to avoid conflicts during the term of your employment. We can analyze dentist contract clauses for each new associate.
Essential Terms for Legal Review
Below is a checklist of essential terms that contracts should contain (and a brief explanation of each term):
- Services Offered: What are your patient care duties for the dental practice? Are you given time for administrative tasks?
- Patient Care Schedule: What days and hours per week are you expected to provide patient care and have contact with patients?
- Locations: Which dental practice or facilities will you be based at to provide care at (outpatient clinic, surgical sites, in-patient services, etc.)?
- Outside Activities: Are you permitted to pursue moonlighting or locum tenens opportunities? Do you need permission from the employer before you accept those positions?
- Call Schedule: How often are you on call with the dental practice (after hours office call)?
Dentistry Contract Benefits
- Electronic Medical Records (EMR): What EMR system is used? Will you receive training prior to providing care?
- Base Compensation: What is the annual base salary? What is the pay period frequency? Does the base compensation increase over the term of the Dental Agreement?
- Productivity Compensation: If there is productivity compensation for the associate; how is it calculated (wRVU, net collections, patient encounters, etc.)?
- Benefits Summary: Are standard benefits offered: health, vision, dental, life, disability, retirement, etc.?
- Paid Time Off: How much time off is offered? What is the split between vacation, sick days, CME attendance and holidays? are you free to take time off whenever you want?
- Continuing Medical Education (CME): What is the annual allowance for CME expenses and how much time off is offered?
- Dues and Fees: Which business expenses are covered (licensing, DEA registration, privileging)?
- Relocation Assistance: Is relocation assistance offered? What are the repayment obligations if the Dental Agreement is terminated prior to the expiration of the initial term?
- Signing Bonus: Is a signing bonus offered? When is it paid?
- Professional Liability Insurance: What type of professional liability insurance is offered: claims made, occurrence, self-insurance?
Professional Liability in Dental Associate Agreements
- Tail Insurance: If tail insurance is necessary for the dental associate, who is responsible to pay for it when the Dental Agreement is terminated?
- Term: What is the length of the initial term? Does the Dental Agreement automatically renew after the initial term?
- For Cause Termination: What are the grounds for immediate termination for cause?
- Without Cause Termination: How much notice is required for either party to terminate the Dental Agreement without cause?
- Post Termination Payment Obligations: Will you receive production bonuses after the Dental Agreement is terminated?
Restrictive Covenants in Contracts
- Non-Compete: How long does the non-compete last and what is the prohibited geographic scope?
- Non-Solicitation: How long does it last and does it cover employees, patients, and business associates?
- Notice: How is notice given? Contact via email, US mail, etc.?
- Assignment: Can the Dental Agreement be assigned by the employer?
- Venue: Where will litigation and any law conflicts be heard?
- Alternative Dispute Resolution: If there is a conflict, will mediation or arbitration process be utilized? Who decides what attorney oversees the process? Will it be a health care attorney?
How to Get out of a Dental Agreement with a Non Compete
Non compete in dental agreements were originally considered as restraints of trade, and thus were invalid on the grounds of public policy at common law; however, many restraints of trade incident to employment contracts were upheld based on the rule of reason. Thus, restrictive covenants between dentists not to compete after termination of employment are generally enforceable as long as it is reasonable.
However, there are a few states which prohibit health care provider non compete clauses. Please check your state laws for dental non compete agreements to see what the specific rules for your state are. The general test for reasonableness of non-competition agreements holds that on termination of employment, a covenant which restrains an employee from competing with his former employer is termed reasonable if:
- The restraint is not more than required for protecting the employer,
- It does not inflict any untold of hardships to the employer, and
- The restraint is not injurious to the public.
Unreasonable Non Compete Practices in a Dental Employment Contract
For instance, in Ohio, a non-competition clause was unreasonable when it was noted that a provider’s sub-specialty was uncommon, and that it would be harsh if the restrictive covenant was enforced as the hospital where he was precluded from practicing was only one of the few institutions in the area where he could practice his specialty.
Thus, in Ohio, covenants restraining providers from competing with his employer upon termination is considered unreasonable if it inflicts untold of hardship on the professional, is injurious to the public, if the demand for the dentist’s medical expertise is important for the community people and if the dentist’s services are important for the health, care and treatment of public. However, non-competition clauses for dentists, in general, are enforceable as long as they protect some of the employer’s legitimate interests.
Dental Agreements Pitfalls: Disorganized Practice, Malpractice Insurance, Lack of Associate Resources
Dentists face much risk when they take the review of contracts into their own hands. Dental contract terms are highly negotiable and have a great impact not only on professional life and practice but also on lifestyle, family and the future. There are many important dental contract terms and clauses which can provide and present new complex and diverse issues for any DDS or DMD, including:
- Unfavorable call schedules
- Small Production Bonuses
- Lack of Benefits
- Not enough paid-time-off
- Not enough vacation time
- Unfair Non-Compete
- Inadequate professional liability coverage
Dental Contract Lawyers
When dental contracts are reviewed by an experienced lawyer, you will find great financial benefits which end up outweighing the cost of the contract’s review. If you are in need of legal assistance with a dental contract review schedule a review with Chelle Law today!
Dentist Additional Information
Dental associate contract red flags. There are obviously dozens of red flags in a contract. However, there are a handful that are necessary to take a solid look at and we’ll kind of go over those. The first thing would be no without cause termination. In any employment contract, there’s going to be a section called term, which just means how long the contract is, and then termination, how the contract can be terminated. Contracts can be terminated in several ways. The term could just end, and it’s not renewed, it could be terminated by mutual agreement, it could be terminated for cause. If one of the parties breaches the contract, doesn’t fix the breach, the other party generally has the option to immediately terminate the contract. And then the last and most important way is without cause termination.
This just simply means that either party can terminate the agreement at any time with a certain amount of notice to the other. Normally, somewhere between 30 to 90 days. The reason why 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 just 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. There are plenty of scenarios where if a dentist associate is on net collections, volume, compensation, the owner will generally, I’d say, overestimate what the associate will make. And so, they can get into a job if they’re not paid a daily rate or a salary, it’s more of just eat what you kill and get a percentage of whatever is collected and the volume simply 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, first thing, absolutely makes 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 notice, you do your, whatever the notice period is, move on. Absolutely necessary. Two, compensation. If you are a dentist and you are being paid on either net collections, encounters, some kind of volume metric and you are not 100% certain that the volume is there for you, you need to be very careful about taking that job.
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, I guess, unwilling to make income guarantee and then is bringing in a dentist, but in that circumstance, only pay them based upon volume metric. Just like in the example I just 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, for anyone who’s new, maybe just out of training or you’re relatively new, it’s important to have guaranteed salary or daily rate. And then once you’re there and maybe you’ve been there a year or two, and you see that the volume is there, maybe potentially you can make more under collections model, well then, talk to the owner about switching. But at the very beginning, I find most places that try to lure dental associates in with big numbers. It almost never shakes out that way. Another big red flag is the non-compete. This is one thing that varies from state to state. Each state kind of has its own view on what’s a reasonable non-compete. Non-competes are enforceable, and almost every state, California, New Mexico, and Massachusetts are three of the few states where they’re completely unenforceable.
But for most states, it must be a reasonable length, usually about 12 months, sometimes they’ll try to do two years and then some kind of reasonable geographic restrictions. Usually somewhere between 5 to 15 miles. If you have a five-year, 50-mile non-compete, that’s crazy! You don’t want to sign something like that. You want it to be no more than a year, and then no more than, I would prefer 10 miles from your primary practice location. Many of these big corporate dental offices have multiple locations in the area and 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, obviously, corporate dental conglomerates continue to gobble up some of the 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 be knocked out of your city. So, what’s in the non-compete is certainly important. And then last and I’ll just touch on this briefly, the benefits. If a dental associate is an employee, the employer should pay for your license, DEA registration, and continuing education. If you’re moving from out of state, reasonable moving expenses, and reimbursement are normal things that an employer should pay for. So, think about that as well.
How to get out of a dental associate contract? When you are a dental associate, you will sign one of two contracts. Either an employment agreement or an independent contractor agreement. Ultimately, it’s kind of the same way of terminating the agreement, but I’m just going to talk specifically about employment agreements because those are, I’d say the standard type of agreement for a dental associate to sign. When the contract is signed, there will be language in the contract that states the term of it. So, how long it lasts and then also termination, meaning how either party can terminate the agreement. As far as the term is concerned, normally, 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 or I’d say more often recently, there has been what’s called evergreen contracts where there’s no term listed at all, and it just states the contract continues until someone terminates it. One is not better than the other. It’s ultimately the same result. After you find out what the term is, then go to the section that talks about termination. The ways to terminate a contract are one, by mutual agreement. If both parties feel like it’s just 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 just going to wash our hands of this and move on.
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, neither party decides to renew, the contract is terminated and that’s it. For cause is another type of termination. If one party is in breach of contract, 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 normally, there would a language that’s called a cure period. And the cure essentially gives the party who is breaching the contract a period to fix whatever the problems are. Normally, it’s somewhere between 15 to 30 days. Other blogs of interest include:
In this scenario, let’s say the dental office is not paying a bonus that they said that they would, or it’s not timely, or whatever the issue is, the dental associate would send them a written 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. The last way and the most frequent way is through what’s called without cause termination. Every contract that a dental associate signs absolutely needs to have without cause termination. And what that means is either party can terminate the agreement at any time with a certain amount of notice to the other. Why is this important? I find this, especially in the dental industry. The volume/if compensation that’s tied to collections can really be puffed up before the dentist starts. And so, they might get into a situation where maybe they’re being paid purely on production, the volume simply isn’t there, 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. How 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, my last day at work will be X date, appreciate the opportunity. And that’s it. That’s all you must do. That’s the most normal way of getting out of a dental associate contract. 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, and then they can either 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.
However, they still must pay you for that notice period. So, if you had a 30-day notice, the dental office states were terminating the agreement. We don’t want you to come to work tomorrow. They still would have to pay the dentist for those 30 days. Now, the tricky part comes in. If you’re not on base salary, you’re not getting a daily rate, or you’re only getting paid on production, obviously, if you’re not productive, you’re not going to get paid. Then there needs to be a discussion prior to signing the contract and get language in there so that the dentist isn’t essentially working for free or not getting paid at all for that notice period. The reason why there is notice period, at least in the healthcare field, is generally for continuity of care. What they don’t want is either a dentist or any kind of healthcare provider to just not show up one day and say I’m leaving.
And then there’s a bunch of patients on schedules, people who need work done, and there’s no one to provide that. They can put the patients in a tough spot if there’s just no notice and their provider leaves. It is not the dental associate’s problem, however, if they give enough notice, these are the patients of the practice, not the dental associate. And so, when the dental associate terminates the agreement or is terminated, once they leave, they have no obligations as far as the patients go or having to worry about referring them out or transitioning somebody else. That’s the employer’s problem. So, to get out of a contract, the term can end, you can mutually agree to terminate it, you can terminate it for cause if the other party doesn’t fix a breach, or you can just give without cause termination in a letter, finish out your time and move on.