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 kind of the normal way to terminate an agreement. And then I’ll also talk about what happens if you signed an agreement and you don’t want to go through with it.
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 give a brief description of how to terminate a contract and then I’ll get into the second part last. In any employment agreement, it’s going to 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. One, if it’s just a fixed term. Let’s just say it’s a two-year contract and there’s no language that states that automatically renews, at the end of the two years, if neither party has renegotiated anything, then it just ends, and the contract terminates. 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 just move on. The third way would be with cause termination. In every contract, it’s going to state how the employer can get rid of the employee and then what are the reasons. Most of them don’t, but some of them will have a brief section about the things an employee, the dental associate, can terminate the employer for. But in any contract, it’s going to state if either party thinks the other is in breach of contract, let’s just say the dental associate has productivity compensation. They’ve earned the bonuses, but they’re not being paid the bonuses either 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 fixed, then the party can no longer terminate the contract for cause. That goes both ways. Other blogs of interest include:
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, you need to fix this. The third way is termination for cause. The last and the most common way is without cause termination. Every contract will have section that states the contract 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 just say you found a new job that’s better, you want to move on. You just 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. Now, a couple of things you need to think about in that scenario.
The restrictive covenants are going to continue after the contract ends, so the non-compete, the non-solicit. You also need to think about who’s going to pay for tail insurance if you have a claims-made policy, are you going to have to repay any bonuses if you left early? And then also, if you’re on hybrid productivity model, are you going to get paid all the bonuses that you’ve earned? Those are things to think about after the contract terminates. Now, the other way would be if you signed a contract and then decided not to go through with it. This one is more of a gray area. Some contracts will explicitly state, 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.
Like, you owe us $20,000 if you sign and don’t start, or you owe the recruitment costs and credentialing fees and any licensure stuff that we’ve already paid out for you. Most of them honestly don’t have that. If you are in a scenario where you’ve signed but don’t want to go forward, I find it’s best just to be completely honest with the employer and just say, look, these are the reasons why I signed the agreement, but things have changed. It could have been maybe a family illness or decided to pursue additional training or whatever. 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 just give them a reasonable, 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 longer 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 extraordinary excuse, they’re not going to be okay with that. And they’ll likely, or probably come after you for some amount of money.
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 just absolutely don’t want. It’s a position that you don’t want to be in. 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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