How to Get Out of a Dentist Employment Contract? | Employment Agreement

How can you get out of a contract as a dental associate? Let’s say you’ve signed an agreement, and for whatever reason you decide, this is not working out. I want to move on. How do you get out of the contract? I guess there are two ways of thinking about this. One is to get out of a contract. It’s easy. Every contract is going to have language about how to terminate the agreement. And in my mind, terminating the agreement is the same as getting out of a contract. I’m going to walk through the standard way to end an agreement. And then, I’ll also talk about what happens if you sign an agreement and don’t want to go through with it.

Four Ways of Ending a Dental Employment Contract

I think that might be what people are thinking about when they say, can I get out of a contract even if I haven’t started yet, but I’ve signed. What are the issues that can come about from that? Let’s just briefly describe how to terminate a contract, and then I’ll get into the second part last. Any employment agreement will state the term of the agreement, meaning how long it is, and then the termination part. And there are generally four ways to terminate a contract. 

Fixed Term

One, if it’s just a fixed term. Let’s say it’s a two-year contract, and no language states that it automatically renews. At the end of the two years, if neither party has renegotiated anything, then it just ends, and the contract terminates. 

Mutual Agreement

That’s it. You could also mutually agree to terminate the agreement. Maybe it’s just not working out. It’s not a good personality fit. Both parties can say, you know what, let’s move on. 

With Cause Termination

The third way would be with-cause termination. Every contract will state how the employer can eliminate the employee and the reasons. Most of them don’t, but some will have a brief section about how an employee, the dental associate, can terminate the employer for what reason. But in any contract, it’s going to state if either party thinks the other is in breach of contract. Let’s say the dental associate has productivity compensation. They’ve earned the bonuses, but they’re not being paid on time or at all. 

They will send written notice to the employer stating you’re in breach of contract. And then usually, there’s a 15 to 30-day window. It’s called a cure period for the breaching party to fix the breach, to cure it. And then, if it is set, the party can no longer terminate the contract for-cause termination. That goes both ways. If maybe the dental associate isn’t taking calls like they said they would, or something like that, the employer can state, you’re in breach of contract. It would be best if you fixed this breach. The third way is termination for-cause. 

Without Cause Termination

The last and the most common way is without-cause termination. Every contract will have a section that states the agreement can be terminated at any time, for any reason, with a certain amount of notice to the other party. Usually, it’s somewhere between 60 to 90 days for most dental associates. And so, let’s say you found a new and better job, you want to move on. You give them written notice and then work out those. Let’s say it’s a 60-day notice. Work out those 60 days, the contract ends, and you can move on. 

What an Employee Need to Consider Before Ending Their Employment Agreement

Now, you need to think about a couple of things in that scenario. The restrictive covenants will continue after the contract ends, so the non-compete, the non-solicit. You also need to consider who will pay for tail insurance if you have a claims-made policy. Are you going to have to repay any bonuses if you leave early? And then also, if you’re on a hybrid productivity model, will you get paid for all the extras you’ve earned? Those are things to think about after the contract terminates. 

Not Getting Started After Signing an Employment Agreement

The other way would be if you signed a contract and decided not to go through with it. This one is more of a gray area. Some contracts will explicitly state that if you sign an agreement and then decide not to go through with it, here are the penalties. So, maybe they would have a set fee. You owe us $20,000 if you sign and don’t start, or you owe the recruitment costs, credentialing fees, and any licensure stuff that we’ve already paid out for you. Most of them honestly don’t have that. 

Suppose you are in a scenario where you’ve signed but don’t want to go forward. In that case, I find it’s best to be completely honest with the employer and say, look, these are why I signed the agreement, but things have changed. It could have been a family illness or a decision to pursue additional training. I mean, maybe you got a better job offer, although telling the employer, they’re not going to be too keen on hearing something like that. 

But if you can give them a reason, I don’t know if “excuse” is the right word, but just kind of, these are the reasons why I don’t want to go through with the contract. Most employers are okay with that without the dental associate having to pay anything. Now, the more extended amount of notice you give, the better. I mean, if you call the employer a day before you’re supposed to start and say, I’m not going to start. Unless you have a great excuse, they will not be okay with that. And they’ll likely, or probably come after you for some amount of money. 

Summary

So, you want to give as much time as possible, as much notice as possible if you’re not going to start, and then a reasonable explanation why you’re not going to start. I would never suggest entering a contract or starting a job that you absolutely don’t want. It’s a position that you wanted. Maybe you just had a much better compensation offer from someone else, or maybe there’s a better opportunity. Whatever it is, it’s better to deal with consequences before you start a job than to start and then leave a month later. 

You don’t want to burn bridges if possible, so providing a reasonable explanation and proper notice is the best way of handling that. But you are potentially open to liability if you’ve signed the agreement. Maybe they’ve paid out some signing bonus or relocation assistance, or as I said before, credentialing fees, licensure, stuff like that. Those are things that they’ve paid for that the dental associate will likely have to pay back at some point. So, that’s kind of how you get out of a dental associate employment contract.

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How to Get Out of a Dental Associate Contract?

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.

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.