How can a veterinarian associate get out of a contract? So, you’re working for an employer, you’re unhappy, you want to leave. How do you get out of the contract? Your employment contract should contain four ways of terminating the contract. One, if there’s a fixed term, meaning, it’s a set amount of time and there’s no language that states it automatically renews for successive terms, let’s just say it’s two years, you finish those two years, it doesn’t renew, the contract terminates, you can move on. That’s the first way. The second way is mutual agreement. At any point, either party can say, look, this isn’t working. Let’s just wash our hands of this relationship and move on. That does not happen very often, but that’s another way.
The third way would be with cause. If one party is in breach of contract, the other party can provide them with written notice. And then normally, they’d have a short period to fix whatever the alleged breach is. That’s usually somewhere between 15 to 30 days. And then at the end of that period, if they did fix the breach, then they couldn’t terminate the contract immediately. If let’s just say the vet has bonus productivity calculated quarterly, the employer just either refuses to pay or has been slow to pay or whatever, the veterinarian provides them a written notice. And then they have 15 days to fix it. If they don’t fix it within those 15 days, then the vet can terminate the contract immediately at their option.
And then the last and most common way to terminate a contract is without cause termination. Without cause termination simply means either party can terminate the agreement at any time, for any reason, with a certain amount of notice to the other party. For most vets, it’s somewhere between 30 to 90 days. And that’s just the most common way. I mean, probably 9 out of 10 contracts are terminated in that way if you’re a vet. There are plenty of ways to get out of a contract. Now, what are the repercussions if you do end up leaving and terminating the agreement? Well, many contracts and this is mostly for the initial term, as I said before, let’s just say you have a two-year initial term. If you receive a signing bonus, relocation assistance, probably licensure, malpractice, or some benefits, there may be language in the contract that states, if you leave within that initial term, you must pay back a portion of that signing bonus or that relocation assistance, or maybe you’re not eligible for productivity bonuses or something like that. Other blogs of interest include:
- Difference Between a Veterinary Associate Offer Letter and a Contract
- How Much Time Off Should a Veterinarian Get?
So, investigate the language of your contract and see, alright, if I do terminate the contract early, what are the repercussions? What do I have to pay? What do I have to pay back to them? Or what am I losing out on compensation? A lot of vet clinics use the pro Sal method and in that kind of model, you’re paid basically on your production. And so, you need to be very careful that if you do terminate the agreement there’s language in the contract that states you will be compensated for any of the services that you’ve rendered that haven’t been collected. In veterinary medicine, you don’t have, at least generally don’t have kind of the same log time as a physician would have where maybe they do services.
And the vast majority wouldn’t be paid out for 60 to 90 days. Just based upon the cash nature of veterinary medicine, the percentage of collections that are outstanding is much less than other specialties, but you still don’t want to miss out on that. I’d say veterinary insurance for individuals is becoming more popular. And so, the average count’s receivable cycle is somewhere between like 30 to 90 days for that. Think about this: if you’re paid on productivity on just what your net collections are, and then you terminate the agreement and you have a bunch of net collections outstanding, and the contract states, you’ll only get paid up to the date of the contract terminates, well, you just work for free for a month or two, so nobody wants to do that.
If you do decide to terminate the agreement, make certain, and this is before you sign the contract, make certain it states that you’ll be paid any of the collected services for anything that you did while you’re there, even after the contract has been terminated. Having to get out of a contract is honestly just a kind of normal part of doing business. With all these enormous conglomerates gobbling up all of the vet-owned practices, I’d say there’s a lot of unease and unhappiness for many veterinarians at this point. And they may be in a practice that they’ve loved for 10 years and then the corporation sweeps in, buys it out and things change immediately. And then they have to decide, alright, am I going to sign this new contract? Am I going to terminate the old one to leave?
There’s just a lot of turnover in that field right now. And figuring out the most effective way of getting out of your contract is very beneficial. Hopefully, that helps and gives you the little basics on how to get out of an employment agreement.
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