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.

Notice Period

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. If you’re not productive, you’re not going to get paid. Then there needs to be a discussion before signing the contract and getting language in there. So that the dentist isn’t essentially working for free or not getting paid all for that notice period. There’s a notice period, at least in the healthcare field, generally for continuity of care. They don’t want a dentist or healthcare provider just not to 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 information, these are the patients of the practice, not the dental associate. And so, when the dental associate terminates the employment agreement, once they leave. They have no obligations as far as the patients go or worry about referring them 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, terminate it for-cause termination. If the other party doesn’t fix a breach or give without-cause termination in a letter, finish your time and move on.

Other Blogs of Interest

• How to Negotiate a Dental Associate Salary
• In a Dental Practice, is 10 Miles a Reasonable Non-Compete for a Dentist?
• What do You Need to Know About a Dental Associate Employment Agreement?

How do you Terminate a Dental Associate Contract Without Cause?

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. 

The Initial Term Expires, and There’s No Renewal

In the contract, it’s usually going to state how long the contract lasts and the duration of it. Usually, it’s somewhere between one and three years. However, I’d say more and more contracts will have no fixed term. They’ll go on forever unless terminated by a party through one of the three ways we’re about to discuss. So, look at how long it lasts and whether it automatically renews. If it does, it’s usually for one-year terms, and then we continue until terminated. That’s the first way to terminate a contract.

Mutual Agreement

It would help if both parties said, “Hey, it’s not working out.” It would allow if you didn’t give us any notice. Let’s 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 must provide written notice to the other party. Then that party would have a certain amount of time to fix the breach. They will do that during what’s called a “cure period.” A cure period allows one of the parties accused of being in breach of contract to fix whatever the problem is. Usually, it’s 15 to 30 days.

With Cause Termination

Let’s take monthly bonuses paid to a dental associate with productivity-based compensation. And the employer isn’t paying the monthly premium, even though they earn 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 monthly bonus, and you’re not. If you don’t fix this within 15 days, I can terminate the agreement immediately for-cause termination. With-cause termination is the third way. 

Terminating Employment via Without Cause Termination

Now, this blog aims to show how the dental associate terminates the contract without-cause? So, this is the most common way of ending a contract. In any dental associate agreement, you need to ensure there’s a without-cause termination, and I’ll say why. Typically, it would be somewhere between 60 to 90 days.

That means either party can terminate the agreement at any time with a certain amount of notice to the other. As I said, somewhere between 60 to 90 days is a 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 the practice a letter stating 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 contract terminates, and both of you can move on. 

Employment Agreement Red Flag

It is an enormous red flag if you have a dental associate contract that does not have without-cause termination. And why? If you can’t get out of a contract, it can stick you 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? Let’s say the volume would be this amount, and it’s not, and the employer pays you on pure productivity. You’re getting paid a quarter of what you expected, or maybe the hours are bad, the calls are wrong, or there’s a lack of staffing. 

Which makes you completely inefficient, or maybe the practice owner is just a jerk. You don’t enjoy working with him. There could be dozens of reasons 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 ensure 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. 

What if There Is No Without-Cause Termination in the Contract?

Now, it’s rare it wouldn’t have without-cause termination. But if it’s not in there, it’s because the employer is probably a bad manager, or you’re a terrible business person. And they can’t keep people on staff. And therefore, they’re trying to secure them for a period. So, no matter what, you want without-cause termination, somewhere between 60 to 90 days. Now, why that amount of time? For any healthcare professional, there needs to be continuity of care. It would be best if you considered it.

So, there need to be arrangements to either hire a new dentist to take over or refer the patients out to someone else. That’s why there needs to be a little lead time to ensure continuity of care. It is paramount to the termination. Well, that’s about it for without-cause termination.

Can an Employee Terminate an Employment Contract?

The short answer is, obviously, yes. However, it will be determined based on the terms of the contract. In any employment contract, there will be a section that deals with the times, the contract’s length, and then termination, so how that contract ends. Let’s first talk about the terms of the agreement.

Most contracts will have a date, meaning it’s a year-long, two-year, or three-year contract. Then if the agreement doesn’t terminate, it will state a language. It will automatically renew for successive one-year terms. In that case, if a contract isn’t closed in another way after the initial period ends, it’ll just continue forever until terminated.

I would say there is a rarely fixed term with no language about automatic termination. If it’s just a two-year fixed term with no automatic renewal, it would just end at the end of two years, and that would be it. The parties can go their ways. 

What Are the Reasons for Contract Termination?

Now, regarding terminating the contract, the first part is that if there is no renewal, it ends, and the contract ends. Second, by mutual agreement. Suppose the employer and the employee agree that the relationship isn’t working. In that case, they can always, by contract, decide to move on, and then that’s it, you can move on. Next would be with-cause termination. In this case, if someone breaches the contract, there’ll be language that states why the employer can fire the employee. If you need a license to perform the activity and lose your license, or if insurance is required and you’re uninsurable. There are, I guess, vague behavioral clauses. 

If you’re disabled, you die, I mean, ordinary things, but there should also be a part called a cure. And so, in that case, if one of the parties believes the other party is in breach of contract, the most common reason is just payment concerns. Either someone is unpaid, they were promised an amount in the associate employment agreement, or maybe the timing. Also, the bonus payment is involved, and there is disagreement over the professional owed amount. That’s always a big, I guess, reason why there would be an allegation of breach of contract. 

What Happens if Breach of Contract Is Committed?

If you believe the employer was in breach of contract, you’d have to provide them with written notice. And then the cure period means the employer would have a period to fix whatever the breach of associate contract is. Typically, that’s somewhere between 15 to 30 days. And the same can go for an employee. 

If the employer thinks the employee is in breach of contract, they give them written notice, and then the employee has 15 to 30 days to fix the breach. If the breach is unfixed, the other party still believes the other party is in breach. Usually, that party has the option to terminate the dental associate agreements immediately. The last and most common way in most employment contracts is without-cause termination. There’ll be language that states that either party can terminate the employment agreement at any time, for any reason, with a certain amount of notice to the other party.

Typically, it would be somewhere between 30 to 90 days. Suppose the professional is unhappy and wants to move on. In that case, they give written notice saying I’m utilizing the without-cause termination notice in the contract. Then they must work out 30, 60, or 90 days, and then at the end of that period, they can move on without any concerns regarding terminating the contract. Yes, an employee can terminate an employment contract, but they must follow the terms of the agreement. 

Employment Contract Termination and Non-Compete Law

Just because an employee terminates the contract doesn’t mean it necessarily ultimately ends at that point. They could be required of the employee if they terminate the contract. Many times, if given a signing bonus or relocation assistance, The employee would have to pay back a prorated portion of that if they left within the initial term of the employment agreement. Others could have non-compete associated with it.

So, just because an employee terminates the contract doesn’t mean that the non-compete doesn’t apply. It does, or at least it does in most circumstances if you’re in a state where non-competes are enforceable. How long will that last if there is a geographic restriction and then some temporary condition? That will continue even if the employee terminates the contract. If some malpractice insurance is involved and tail insurance is needed, it will say who must pay for that in the contract. Employees may also be responsible for that if they terminate the agreement. Although the employee can terminate the employment agreement, it doesn’t mean that there aren’t at least some strings attached. 

One of the highest priority things I look at in the contract when I’m going over it with a professional. How do you get out of the agreement? And then what do you have to do if it ends within a certain period? In that way, the employee can know that I need to set aside this amount of money if I must pay for tail insurance or if I must pay back the signing bonus. So, they’re essential discussions, and things employees could negotiate before signing any employment agreement. Hopefully, that was helpful—kind of an overview of termination of an employment contract. 

How You Can Terminate an Agreement

You probably shouldn’t, and your employment contract probably prohibits it. In any agreement, it’s going to state how you can terminate an agreement. It could be for-cause, without-cause, mutual termination, or maybe the initial term ends. But in most cases, I mean most contracts are terminated without-cause termination. Without-cause termination, either party can terminate the contract with a certain amount of notice to the other. Typically, around 30 to 90 days is a standard amount for most employment agreements. Suppose you are an employee, and for whatever reason, you don’t want to work for the employer anymore. In that case, you must follow those terms written on the without-cause termination notice.

And it always needs to be written. It’s going to state that you must write a letter. And then, it will also say if it’s a 60-day without-cause termination. The employee has to provide it 60 days prior, work it out, and after the 60 days are over. The employees are free to go once the contract terminates, and the employees are free to move on. They want to go where they want to go after that—considering if there’s a non-compete or a non-solicit. Still, we’re not going to get into that today. 

How Do Employees Communicate a Notice?

The most crucial part as far as this goes is that it will be called “notice” or “notices.” It’s toward the back of the employment agreement initially provided by the company. And this will state who, then how you need to provide notice if there is communication.

An employee could provide in writing a certified letter or overnight hand delivery of whatever termination notice you’re going to provide. And that would then be considered adequate notice. Very few contracts allow email as an effective notice medium. If you gave, let’s say, you wrote an email telling your employer. I’m giving you without-cause termination notice, and I have 60 days. X will be my last day of work. I appreciate the opportunity. Well, if the email is not an effective communication medium within that notice section, that’s not considered effective notice. And then, the employer could make you work for another 60 days until you provide adequate notice. So, that’s the essential part. You need to look in the notices section and determine if the proper way to terminate the employment agreement includes email. 

I can tell you if I review a hundred contracts, 98 of them will not include email or fax. And you certainly can’t just verbally tell your employer you’re leaving. It must be in writing. And most often, it has to be sent either by certified mail or hand-delivered. It depends on whether you work for a small practice or a vast conglomerate with locations in every state. It’ll be impossible to hand-deliver the notice if you must provide notice to the headquarters, and that’s halfway across the country. 

The Consequence of Notice Not Received

To be safe for the most part, you need to write a letter. You’ll have to print it out and send it via certified mail that the employer is using. Usually, it’s one or two. You must send it to the owner if it’s a smaller practice. If it’s a big conglomerate, you have to send it to probably your boss plus the legal apartment of the company as well. If you look through, how much notice do I have to provide? And then how do I have to provide effective notice? You’ll be safe. 

I have a couple of scenarios, and people have called me after the fact. And they’ll say I sent a letter to my employer’s email. I told them I was going to terminate the contract, and they didn’t say anything. I assumed that my contract would end on a specific date. The employer was mad about the employee leaving the company. The employer ticked off that they were leaving. So, what they did was they just sat on it for 45 days. And then, 15 days before the physician thought he was going to leave, they said, you didn’t provide us with effective notice. Email isn’t an effective form of communication to provide notice. You owe us another 60 days until you give us adequate notice, meaning a written letter sent via certified mail. 

And so, the physician had already lined up another job, he had a start date in mind, and then he had to return to the new employer. He would say, I apologize; I will have to delay my start date by almost two months. That was a tough pill to swallow for the physician. If you follow the terms of the notice section, then you should be okay.

Can an Employee Terminate a Contract at Any Time?

The short answer is probably. However, it’s going to depend upon the language in the contract. There are ways that an employee can terminate an agreement: one, if there’s a fixed term, meaning a one-year, two-year, or three-year contract, and there’s no language that states the contract automatically renews, then at the end of that fixed term, if neither party is going to go or decided to sign another arrangement, the contract terminates, both parties can move on. That’s it. That’s one way on the agreement that can end a contract. Two, through mutual agreement. Maybe it’s not working out, and both parties are like, you know what? Let’s move on. You can mutually agree to terminate the agreement. Three, for the cause. In any employment contract, there will be a section called termination. In that section, it’s going to state how both parties can terminate the agreement.

Employee Contract Termination Without Cause

Without-cause termination is going to be. If one party breaches the contract somehow, how can the other party terminate the contract for the breach? And in most of the for-cause termination clauses, it’s going to state if one party believes the other party is in breach, they must give them written notice. And then that party usually has a period to fix the breach. We called that a cure period. Usually, it would be somewhere between 15 to 30 days. Maybe the employee wasn’t getting paid a bonus that the employer said they would. The employee lets the employer know: you’re in breach of contract, you have 15 days to pay me my bonus, or I can terminate the agreement immediately.

The employer can no longer terminate for-cause if the employer does pay the bonus. And then they could go to the last way of ending the contract without-cause.

Termination Notice Period

In every employment contract, this is very important. There should be a without-cause termination. It means either party can legally terminate the agreement at any point, for any reason, with a certain amount of notice to the other party. Usually, that notice period will be between 30 to 90 days. Why is this important? Suppose an employee takes a job and maybe they were lied to by the employer. In that case, if they’re on a production-based compensation from collections, commission, percentage, encounters, and healthcare RVUs, it doesn’t matter. But suppose an employee agreed to the contract and the employer gives no guaranteed base, daily rate, or guarantees. In that case, the volume is not nearly what they expected it to be or what the employer said it would be. They don’t have a way to get out of a contract without-cause. 

The workers won’t have an exit in that job for whatever the length of the term is. That’s not something you want. You always want the ability to get out of the contract with a certain amount of notice in the scenario where the job isn’t what you expected. Maybe your boss is a terrible manager, or they’re placing you in a territory or location you don’t want to be assigned. I mean, hopefully, the employee could check on those in advance of signing the employment agreement. Sometimes, they’re not. Sometimes the employer just straight-up lies to the employee and says, oh yes, all these things are going to be there, and they’re not. Without-cause, employees can insulate themselves from being stuck in a terrible situation for a long time without recourse.

Safety When You Need to Terminate an Employment Contract

So, can an employee terminate a contract at any time? If they have without-cause termination, remember that they must work the entire notice period. Like I said before, if it’s 30 days, give notice, work 30 days, and leave. Suppose you were to go before the end of the notice period. In that case, the employer could theoretically have damages and sue you for lost profits, recruiting, or replacement. So, if you have a notice requirement in your contract, you want to ensure that you give the proper amount.

 Of notice, work it out, and then move on and find a new job.

Can a Dental Associate Break Their Contract?

Can you break a dental associate contract? The essential thing in this video is what you consider breaking a dental associate employment contract. In my mind, it could be two things, and the analysis of those two things is 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 is one way of 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.

Let’s take, for instance, you’ve signed an agreement and don’t want to go through with the job. In that scenario, let’s say you’re in your last year of training. The practice approached you, and the employer said, “Hey, we’d like you to come in, be a dental associate.” You negotiate the dental associate contract and sign the agreement. Then something happens, or you don’t want to go through with it. It could be a family issue, could be a better job opportunity. 

Several things 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 that if the dental associate doesn’t start, these are the consequences, and it could be a penalty. They may say there are liquidated damages like a monetary amount you must pay because you’re not going to start.

Employment Issues in Dentistry Contracts

It could come after you for recruitment fees or any credentialing fees. 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 reasonably understand for a couple of reasons. If somebody does not want to be there, they don’t want to force someone to start or make a big stink about them not coming. Now, the more extended notice you can provide the employer, the more likely it is that it can be a peaceful break. If you have an employment contract and you are supposed to start on July 1st and on June 30th, you say, oh, by the way, I can’t begin to. 

Well, that employer is going to be angry. They may come after you for minor damage unless there’s an excellent excuse. And when I say come after you, they could sue you, or if there’s an arbitration clause, they could go to arbitration. If you have more notice, you need to come to the employer and say, look, the situation has changed. I apologize for backing out. Due to these reasons, I 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 Terminating a Dentist  

I don’t consider breaking the contract if you’re in a current employment agreement and want to get out of it. There will be language in the understanding that states how to get out of the term—one of four ways to terminate a contract. One, there could be a fixed term, meaning how long the contract is. There’s no language about renewing. The meaning of the contract is that there’s no automatic renewal language in the contract. 

The term ends, neither party wants to continue it, the contract is made, and the contract terminates. You could terminate a contract by mutual agreement, meaning, both parties say, you know what, this isn’t working out. No harm, We can both get out of 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 a bonus structure. They’re not paying the dental associate the proper amount.

In that scenario, the dental associate would provide written notice to the employer saying you’re in breach of contract. Typically, 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, The employer could not terminate the dental associate for-cause termination. The last way, and usually the most, I guess, a common way to end a contract is 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. 

Dental Associate Agreements

And in that scenario, if the dental associate wanted to terminate the agreement, they would, in writing, give the employer proper notice.

If it was 60 days, they give them 60 days’ notice. They say, per the agreement, here is my 60 days notice, my last day of work will be this. I 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, they could come after you for damages like lost profits, replacement, recruiting fees, etc. 

Sometimes, the agreement will state if the dental associate leaves in a certain amount of time. They’ll have to pay back signing bonuses, relocation assistance, credentialing, licensing, and all those types of fees as well. So, can you break a contract? 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. Typically, that means employers have a challenging time retaining dental associates. And so, they’re trying to ensure they can’t leave within a certain period. You do not want to be in that position.