Can a Dental Associate Break Their Contract?: How to Break a Contract for a Dental Associate
Can you break a dental associate contract? The most important thing in this video is what do you consider breaking a dental associate employment contract. In my mind, it could be two things and the analysis of those two things are 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.
Employment Issues in Dentistry Contracts
Let’s just take for instance, you’ve signed an agreement, and you 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 the dental associate contract, sign the agreement, and then something happens, or you don’t want to go through with it. Could be a family issue, could be a better job opportunity, I mean, there are several things that could make someone not want to go through with it, but how do you handle that scenario? Well, one, it may state in the agreement, if the dental associate doesn’t start, these are the consequences, and it could be a penalty. They may say there’s liquidated damages like a monetary amount that you must pay because you’re not going to start.
It could come after you for recruitment fees or any credentialing fees that they’ve paid to get you credentialed, if they assisted in your licensure, any of those types of things. Breaking the contract, meaning, deciding not to start could open the dental associate to liability. Now, I find most employers are fairly understanding for a couple of reasons. One, 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 longer notice that you can provide the employer, the more likely it is that it can be an amicable break. If you have an employment contract and your supposed to start on July 1st and on June 30th, you say, oh, by the way, I can’t start. Well, that employer is going to be angry. Unless there’s tremendous excuse, they may come after you for small damage.
And when I say come after you, they could sue you, or if there’s an arbitration clause, they could go to arbitration about it. If you have more notice, you just need to come to the employer and say, look, the situation has changed. I really apologize for backing out. However, due to these reasons, I just 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.
Dental Contracts Compensation After a Dentist is Terminated
Now, if you’re in a current employment agreement and you just want to get out of it, well, I don’t consider that breaking the contract. There’s going to be a language in the agreement that states how you can get out of the term. A contract can be terminated usually in one of four ways. One, there could be a fixed term, meaning, how long the contract is, and there’s no language about renewing, meaning, there’s no automatic renewal language in the contract, the term ends, neither party want to renew it, the contract is done, 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 go out of it, no harm. That’s it. 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 bonus structure and that they’re not paying the dental associate the proper amount.
Well, in that scenario, the dental associate would provide written notice to the employer saying, you’re in breach of contract. Normally, they’d have a short period to fix the breach, it’s called a cure, somewhere between 15 to 30 days. And then, if they did fix it in that period, then the contract couldn’t be terminated for cause. The last way, and usually the most, I guess, common way 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 just in writing, give the employer proper notice.
Dental Associate Agreements
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, well, they could come after you for damages like lost profits, replacement, recruiting fees, and all that type of thing. And then sometimes, in the agreement, it’ll state, if the dental associate leaves in a certain amount of time, they’ll have to pay back signing bonuses, relocation assistance, credentialing, licensing, all those types of fees as well. So, can you break a contract? Well, 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. Normally, that means the employers had a very difficult time retaining dental associates. And so, they’re trying to make certain they can’t leave within a certain period. You absolutely do not want to be in that position.
Terminating a Dental Associate Contract the Right Way
How can a dental associate terminate an employment contract without cause? Let’s first talk about the basics of terminating a contract. There are four general ways of terminating an employment contract. One, the initial term simply expires and there’s no renewal. In the contract, it’s usually going to state how long the contract lasts, the term of it. Usually, it’s somewhere between one to three years. However, I’d say more and more contracts will have no fixed term, meaning, they’ll just go on forever unless terminated by a party through one of the three ways that we’re about to talk about. So, look at how long it lasts and then whether it automatically renews, if it does, it’s for one-year terms usually, and then we just continue until terminated.
That’s the first way a contract can be terminated. Second, with mutual agreement. If both parties just say, hey, it’s not working out. We don’t need you to give us any notice. Let’s just wash your hands of it and move on. That’s fine. So, either party can terminate by mutual agreement. The third way is with cause termination. If one party is in breach of contract, they would then have to provide written notice to the other party. Then that party would then have a certain amount of time to fix the breach. They will do that during what’s called a cure period. A cure period simply allows one of the parties that’s accused of being in breach of contracts, of fixing whatever the problem is. Usually, it’s 15 to 30 days.
When Can a Practice Not Pay Dentists a Bonus?
Let’s just take a dental associate who has productivity-based compensation where they’re paid a bonus monthly and the employer just isn’t paying the monthly bonus, even though it’s been earned well. The dental associate could give them written notice that says, hey, you’re in breach of contract. You’re supposed to pay me my bonuses every month and you’re not. If you don’t fix this within 15 days, I can terminate the agreement immediately for cause. For cause termination is the third way. Now, the purpose of this blog is, how does the dental associate terminate the contract without cause? So, this is the most common way of terminating a contract. In any dental associate agreement, you absolutely need to make certain there’s without cause termination and I’ll say why. Normally, it would be somewhere between 60 to 90 days. And that just means either party can terminate the agreement at any time with a certain amount of notice to the other. As I said before, somewhere between 60 to 90 days is kind of industry standard. In that scenario, let’s say, a dental associate got a better job offer and wanted to move on, they give a letter to the practice that just states, I am using the without cause termination section in the agreement to terminate it. I will work the 60 days as required.
And then at the end of that, I’ll terminate the agreement, the agreement terminates and both of you can move on. If you have a dental associate contract that does not have without cause termination, it is an enormous red flag. And why? Well, if you can’t get out of a contract at any point, you’re stuck for as long as the term. So, if it is a three-year contract and there’s no without cause termination, you must stay for the three years, no matter what. Now, why would you want to leave? Well, let’s say, they said the volume would be this amount and it’s not, and you’re paid on pure productivity and you’re getting paid a quarter of what you expected, or maybe the hours are bad, or the call is bad or there’s lack of staffing, which makes you completely inefficient or maybe the practice owner is just a jerk, and you don’t enjoy working with him.
There could be dozens of reasons why you’d want to leave an employer, but if you can’t terminate the contract at any point, you are stuck. Why would an employer not have without cause termination in their agreement? Well, the first thing is they’ve had an enormous turnover. People keep leaving. And so, they’re trying to make certain that someone can’t leave before a period. That’s kind of the first thing that I look at when I see no without cause termination. Now, it’s rare it wouldn’t have without cause termination. But if it’s not in there, it’s usually because the employer is probably a bad manager, you’re a bad businessperson, whoever or whatever. And they just can’t keep people on staff. And therefore, they’re trying to secure them for a period. So, no matter what, you want to have without cause termination, somewhere between 60 to 90 days. Now, why that amount of time? Well, in any kind of healthcare professionals, there needs to be continuity of care. It needs to be considered.
So, there need to be arrangements to have either hire a new dentist to take over or refer the patients out to someone else. That’s normally why there just needs to be a little bit of lead time to ensure continuity of care. Kind of paramount to the termination. Well, that’s about it for without cause termination.
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