How long are most dental associate contracts? The short answer is generally somewhere between one to three years. However, there will be language about how the dental associate can terminate the contract which kind of changes the length of the contract. And I’ll get into more detail about that right now. When a dental associate signs an employment contract, normally, it will state the initial term of the agreement will be one year, two years, three years, and then unless either party terminates the agreement, it will just simply automatically renew for a one-year successive term. There will also be language in the contract that will be called without cause termination. And under this section, it’ll be under the termination section. Without cause termination simply means either party can terminate the agreement at any time with a certain amount of notice to the other party.
Normally, in a dental contract, it will be somewhere between 30 to 90 days. Let’s just kind of talk through this. Let’s say the dental associate gets to the practice, not working out, maybe the volume isn’t there, maybe their daily rate is not what they expected, maybe their boss is just a jerk, and they don’t want to work for them. You need to investigate the contract and then under that section, it will say you need to provide 60 days’ notice and then work out those 60 days. And then at the end of that, the agreement is terminated, and you can move on. Even if you have a two-year contract, it’s only if the notice requirement for the without cause termination. Now, this can also be utilized by the employer as well. It goes both ways. The employer could terminate the agreement with the same amount of notice.
And then the dentist would either work out whatever that period is. Or if the practice says, you know what, we don’t want you here anymore, go home. They still must pay you for whatever that period is. If you are signing a contract and there is no without cause termination, it is an enormous red flag. Why? Well, I find, especially in the dental industry and I’m not entirely certain why, but I find employers tend to kind of puff up how much volume they have or what the productivity expectation can be. Sometimes, it just simply doesn’t work out. And if the dentist is, let’s just say, on a productivity-based agreement, right? Either the number of encounters you have per day or the net collections received to the practice from your specific services, if you’re paid purely on productivity and the volume simply isn’t there, and you’re not making any close through the amount of money that you should, and you have no ability to terminate the agreement without cause, you are stuck in that situation for as long as the contract lasts. Other blogs of interest include:
So, never sign a contract that does not have without cause termination language in the employment agreement. I find that the organizations that provide employment agreements don’t include without cause termination. It’s usually because they’ve had a lot of turnovers. And if an organization has a lot of turnovers, it’s usually for a reason, meaning, either they’re bad managers, they’re hard to work with, or they don’t know how to attract more patients. There could be several reasons, but if it’s missing from the contract, that is certainly rare. And it’s also an enormous red flag. Even if you were to negotiate adding that into the agreement, the fact that it wasn’t there in the first place should really get your antennas up and you need to dig deeper into, okay, well, why wasn’t there in the first place? Just ask them straight out what the turnover has been like or the dental associates in this practice, and then do a little bit more digging.
You don’t want to get yourself into a situation that you can’t easily get out of. Now, if the dental associate does decide to terminate the agreement without cause there may be some things they have to think about. One, they may have to repay signing bonus or relocation assistance if they leave within the initial term, they need to figure out who’s going to pay for the tail insurance for the malpractice policy if it’s claims-made coverage. The non-compete and non-solicit will still apply even if the dental associate terminates the contract without cause. So, they need to know the terms of that. Are they going to have to move? Can they continue practicing within the area? There are things that must be thought about when terminating the agreement without cause, but the most important thing is you can do it. The length of the contract, honestly, doesn’t really matter if there is without cause termination.
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