What Should a Dentist Put in a Termination Letter? | Dental Contract

What should go into a dental associate termination letter? Meaning, if a dental associate has decided to leave a practice and they’re terminating the dental associate employment contract, what needs to go into that letter? Let’s first talk about termination. The contract can be terminated in several ways. One, the term could just end if there’s no automatic renewal. And then after that period, the parties haven’t decided to renew the contract, the contract just ends, and they move on. You don’t need a termination letter in that scenario. Two, if the parties mutually agree to end the contract, for whatever reason, in that scenario, you will not need a termination letter. Every contract should spell out these relevant termination provisions just like the contract would go into detail if there was a compensation structure involving a draw.

Principal Methods of Dental Associate Contract Termination

There are two scenarios where you would need a termination letter. Either with cause termination or without cause termination. With cause termination would be one of the parties is in breach of contract. And from the dental associate’s perspective, let’s say the employer agreed to pay a bonus and they’re refusing to pay it for whatever reason. The dental associate would send them a letter that states, you are in breach of contract due to this. And then there usually would be what’s called a cure period where somewhere between 15 to 30 days, the party has an opportunity to cure the breach, so to fix whatever the problem is. And in this scenario, if the employer ultimately pays the bonus, then the dental associate couldn’t terminate the contract for cause. Now, without cause termination is most terminations, probably 9 times out of 10 is due to without cause termination.

What Does That Actually Mean for the Employee?

Without cause stipulations means either party can terminate the agreement at any time with a certain amount of notice to the other party. Most of the time, it’s somewhere between 30 to 90 days. Let’s say dental associates are out of practice, and maybe they have a better opportunity somewhere else then they investigate the termination section of their contract. And then it’s going to say, you must provide 60 days written notice order to terminate the agreement. You would then have to work out those 60 days, and then at the end of the 60 days, you could move on. In this scenario, you would have to write a letter and then provide that to the employer. And then at the end of that notice period, you could move on. Let’s talk about the details of a termination letter. In any kind of dental associate contract, there’s going to be a section that’s called notices or notice.

Notice Period in Practice Agreements For an Employee

in the notice period section of the contract, it’s going to state how a party can give proper notice to the other party, meaning, for you to provide effective notice, you need to either hand deliver it, send it via certified mail, fax, email, whatever. It must be a written letter that states, I’m terminating the contract. So first, you need to look in that notice section, see exactly how you can give effective notice. If you don’t give effective notice, if you just verbally tell the owner, usually sending an email is not considered effective, then theoretically, the owner could make you wait longer until you terminate it properly. In this case, if you must send the letter, you figured out how to send it via certified mail, what needs to go in the letter? The letter of terminating a contract without cause is not a time to air grievances.

The Ideal Nature of an Employment Termination Letter

I know when I speak to dentists, all the time, they’re unhappy. They want to put down all of the reasons why they’re unhappy, all the reasons why the employer is terrible at business, and they’ve treated them unfairly. They just want to unburden the problems. Don’t do that. I know it probably would feel good to do that. There is zero benefit to the dentist from doing that. You need to simply put, I am terminating the agreement via this section, I am required to give 60 days’ notice, here is my notice, my last day of work will be this date. Thank you for the opportunity, signed, Dr. Dentist. That’s it, short and sweet. I’m terminating the agreement per this section. Thanks for the opportunity, last day of work, nothing else. If you were to write a two-page airing of grievances, you obviously are going to burn bridges with that employer. But word simply could get out that there were major problems, and you could be labeled as a malcontent.

Whereas if you just keep it short and sweet, don’t get into all the problems, none of that is going to follow you into a new job. I understand it may feel good. Don’t do it, just keep it short and sweet, send it to the employer and then move on. It’s not uncommon for a new employer to call your last employer. And if you had that scenario happen and you just blasted them in this letter, that employer is obviously not going to give you a great recommendation. Whereas if you just say I’m moving on, thank you, there’s not a lot negative that they could say unless there was major friction while you were there, but it just doesn’t make sense.

Do Not Burn Bridges

So, you obviously can’t terminate the contract without cause. It must be via written letter and don’t kind of mess up your future by burning a bridge with the old employer.

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.

Other Blogs of Interest

• Does a Dentist Have to Repay a Bonus if they Terminate the Contract?
• Can You Break a Dentist Contract? | Dental Associate Contracts

How a Dentist Should Negotiate a Contract |  Negotiating Dental Agreement 

How should you negotiate the dental associate contracts? I will give some tips and tricks to get a better dental associate employment contract. First, there’s a difference between negotiating a contract with somebody fresh from training versus an established one in a community. You have more leverage if you are in any community and a corporate practice or another group is bringing out your practice and wants you to join them. 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.

Negotiating an Employment Contract for a Dentist

For most dentists, the most important things are compensation. Is it a base salary? Is it 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 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? And then probably the two highest priorities are who pays for malpractice insurance. Then, who must pay for tail insurance after the contract terminates if it’s a claims-made policy and the non-compete? It is some people’s absolute, most important thing in the contract. Suppose they’re married to a community, 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 your move completely out of the area.

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 are the job offers to come 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? It is a daily rate. Is there some net collection involved? Is it a hybrid? Could it be half base, half net-collections?

Considerations Beyond Compensation Offer

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. Suppose 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.

When Does Actual Negotiation Take Place?

Let’s say it’s a corporate practice in a big city with 10 locations. 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 employment agreement? If they give you an offer letter, they expect those terms to be negotiated in advance and 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 fully understand 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, and there is a non-compete. What are the things they’ll pay for? 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. Alright, I was okay with making $110,000 a year and base salary, not knowing 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. 

Reluctance to Revision of Contract as a Huge Red Flag

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. 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 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, or anything. It is a bad sign moving forward. 

One more thing to think about and absolutely should be top of mind when signing a contract or negotiating the terms of an agreement is the 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.

Red Flags in a Dental Practice Employment Contract

Usually, somewhere between 30 to 90 days. Suppose your contract does not have without-cause termination. That means you must fulfill the entire initial term of the agreement somewhere between one to three years. Typically, 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 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 there because they’ve had a ton of turnover. The turnover is usually due to bad management. It’s either it’s a toxic work environment, or the compensation is not worth the amount of time or effort you’ve, you’ve had to put into it.

It makes sense there’s always without-cause 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. Incremental things that you can change 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’ll think you have no idea what’s happening. They’ll probably move on. When you ask for something, it needs to be reasonable.

How to Effectively Determine What Is Reasonable

How do you find out what’s reasonable or not? Once again, talk to your classmates. Talk to any mentors, talk to 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 any of that. So, that’s how you negotiate a dental associate contract.

Red Flags in a Dentist Employment Contract | Dental Employment Agreement Concerns

Dental associate contract red flags. There are dozens of red flags in a contract. However, there are a handful of necessary things to take a solid look at, and we’ll go over those. The first thing would be no without-cause termination. In any dental associate employment contract, there’ll be a term section. It means how long the contract is and then how to terminate it. There are several ways of contract termination; the term could end unrenewed. Termination could be through mutual agreement. It could be for-cause. Suppose one of the parties breaches the contract but doesn’t fix the breach. In that case, the other party generally has the option to terminate the contract immediately. And then, the last and most crucial way is without-cause termination.

It simply means that either party can terminate the agreement at any time with a certain amount of notice to the other. Typically, it takes somewhere between 30 to 90 days. It 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’reUnless the other party breaches the contract, you’re essentially stuck there for two years.

Dental Associate Employment Agreement Red Flags

There are plenty of scenarios where if 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 into a job if they do not receive a daily rate payment or a salary. It’s more of just eating what you kill and getting a percentage of whatever collection. 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 for 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 you start, you provide notice, you do your, whatever the notice period is, move on. Necessary. Two, compensation. Suppose you are a dentist and receive payment on either net collection. In that case, encounter some volume metric and are not 100% certain that the volume is there for you, you need to be very careful about taking that job.

Dental Associate Contract Compensation

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

So, for anyone new in the practice. Maybe just out of training or you’re relatively new, it’s essential to have a guaranteed salary or daily rate. And then, once you’re in practice for a year or two, you see that the volume is there. Potentially you can make more under the collections model. 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. It is one thing that varies from state to state. Each state has its view on what’s a reasonable non-compete.

Employment Contract for Dentists and Non-Competes

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

Most states, it must be a reasonable length, usually about 12 months. Sometimes they’ll try to do two years and then some 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. They’ll 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’ll only apply to the locations where the dentist provided care. Then, try to limit it to no more than two locations.

In big cities, corporate dental conglomerates continue to gobble up some dentist-owned practices. Suppose someone is 10 locations in a city and is 10 miles from 10 sites. You’ll get knocked out of your city. So, what’s in the non-compete is certainly essential. And then, last, 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. Then, reasonable moving expenses and reimbursement are normal things an employer should pay for. So, think about that as well.