Can a Nurse Practitioner Break Their Contract? | Contract Concerns for Nurse Practitioners

Can a nurse practitioner break their contract? The answer is yes, you can break your nurse practitioner employment contract. But, if that means that you would be breaching it, not adhering to the terms that you signed and agreed to abide by, then there could be some financial and legal consequences that you want to consider. But before we get there, you also want to consider, are there ways to get out of your contract? Normally, in an employment agreement, especially for nurse practitioners, there will be a termination section or articles. And in there, there’s normally a without cause termination. And what that means is you can terminate your agreement with or without cause. You don’t have to give one, you just have to give notice.

So, you want to read that clause. There’s normally an amount of time that you have to give notice. It’s typically 60 to 90 days, so you will give your employer notice. That also is outlined in your agreement as well on how to do that. Most of the time, it has to be in writing and either sent via mail to your HR or headquarters. Sometimes you can hand deliver it, but you have to double-check. You just give your notice, you finish it out for 60 to 90 days, and then you guys go your separate ways. That’s the best way to get out of your contract is just to terminate it without cause. If you cannot give the proper amount of time, and you must leave sooner, you can certainly ask to be let out of your agreement.

That’s probably going to be the best way to handle that. Now, you’re kind of at the mercy of your employer though, if they say, well, I’m sorry, we can’t let you out those contracts, we really need you. Then you have a difficult decision to make. Then you need to decide, are you going to breach the contract and just leave? Or are you going to fulfill it through that notice period? If you do decide to leave, you must be careful, if you’re really breaking the contract, breaching the contract, sometimes there are clauses in your employment agreement that state that if you do breach this agreement, you will have to pay the employer a certain amount of money. This is called the liquidated damage clause and that’s normally anywhere from 10 to 50, kind of depends. Actually, it can even go up from there, $10,00 to $50,000.

You want to make sure that you read the contract, and if these liquidated damages clauses are in there, you want to be careful and try to get out of your employment agreement properly. So, that’s one thing. Also, if you break your agreement and leave the non-compete clause or non-solicitation clause, any of those restrictive covenants are still going to be enforceable. You can’t just rip up the contract and walk away. So, you want to double-check what your non-compete, non-solicitation states. Those still would be binding. And then also, you want to look for your signing bonuses or any relocation expenses that you received. Will you have to pay those back? Typically, you have to be employed with the group for one to three years before those are forgiven. So, yes, in short, you can break your contract. You want to be careful and try to do it the proper way, give your notice and then fulfill that notice period.

If you have to breach your contract, you want to first ask to see if you can be let out of it. If they still say no, then you have a difficult decision to make. You have to consider your consequences of what financially you might have to pay. Is there any sort of litigation that can happen or arbitration? And then just remember all those non-compete clauses, and non-solicitation are still going to be enforceable. And also, any bonuses you received, you may have to pay them back or a portion of them.

Nurse Practitioner Termination Letter 

What needs to be in a termination letter for a nurse practitioner? First, you always want to go to your employment contract and look underneath your termination clauses. It honestly depends on why you are terminating your employment. If you are terminating it just because you feel like it’s not a good fit, you don’t like the leadership, you hate the area, or something like that, you’d want to look for the without cause termination. In there, you’ll find how many days prior notice you need to give upon your termination. It’s normally anywhere between 60 to 90 days. In that case, if you’re terminating your agreement for a without cause or no cause reason, you would just simply write in your termination letter that you are terminating your employment.

You are giving your notice starting on this day and then, per our agreement, my last day will be, and then insert whatever your last date will be. You also want to be careful about how you deliver your termination letter. Again, that’s outlined in your employment contract, you’re going to look under the provision that says “notices”. Sometimes you’re able to hand-deliver your termination, other times it must be emailed or certified mail to a certain address or multiple addresses. You want to be very careful and make sure that you give proper notice. So, you turn that termination letter in properly because the clock doesn’t start until you give proper notice. If you have a 90-day notice period, and you haven’t given proper notice and you think you’re on day 30, but they never received your termination letter, that’s difficult. The 90 days or 60 days or anywhere in there does not start until you give proper notice.

So, make sure you read your employment agreement. If it’s a without cause termination and you have that clause in your contract, your termination letter can be very simple. You can thank them for the opportunity and let them know that you’re happy to help with the transition, but this is not required by your employment contract. You could just simply state, this is my notice, this is the day that I’m giving my notice, this is my last day. That’s really all you have to have. You don’t have to give a reason if it’s a without cause termination. Now, let’s talk about if you are in an instance where there’s no without cause termination. So then, it gets a little bit difficult.

If you want to terminate your agreement, there are a couple of different ways you can do it. First, you have to know if they have breached the agreement. That could let you out if they’ve breached. But you need to give them notice of the breach and what the breach is. What the breach typically looks like is that they’re not paying you. That would probably be the biggest material breach that you could hold them accountable for and therefore terminate your agreement. Most of the time though, you have to give them notice that they are in breach of the contract and give them the amount of time to cure their breach. If they don’t, then you can terminate the agreement. And then the last way, if they have not breached the agreement, you just went out, but you don’t have a without cause termination, this is a difficult position to be in.

Then you’re kind of at their mercy. In your termination letter, if you do not have a without cause termination, just saying that one more time, you must ask to be let out of your agreement. So, this time I would put in language asking to be released from your agreement. You can state the reason if you think that it would help your case. It kind of just depends on the situation. Also, I feel like if you need to be let out of your agreement, it might be helpful if you’re going to be moving out of the area. So, you’re letting them know that you’re not wanting to compete with them. You just have to move back maybe for family reasons or personal reasons, and you don’t have to get into those. You can just say, for family reasons, I’m moving out of the area, I need to be released from my employment contract.

But you are kind of at their mercy, so the tone of that termination letter, you want to ask and be gracious and let them know that you’re willing to work with them to make the transition as easy as possible. This is kind of a difficult situation. So, I do recommend if your contract does not have a without cause provision, sometimes it is better to consult with an attorney to kind of discuss the repercussions because sometimes in employment agreements, there are clauses that are called liquidated damages, which just mean that if you don’t give proper notice or you terminate the agreement for any reason, without their approval within this specific period or the term of the agreement, they can ask for money from you. And that can be tens of thousands of dollars. So, this is a serious thing that you want to take very seriously. Read your contract first, look for that without cause termination. If you have that clause, you’re good to go. Just give your notice and let them know you’re giving your notice on this day, you’re leaving on that day.

If there’s no without cause termination, you want to check and see, are they in breach? If they are, give them notice. You may need to give them time to cure this and if they don’t, then you can terminate the agreement. And if they’re not in breach of the contract, then you’re kind of at their mercy, you have to be asked to be released. And you want to do this very carefully. And if you’re in this situation, I always recommend consulting with an attorney who is familiar with contract employment contract issues specifically for nurse practitioners within healthcare. 

Breaking Contracts and Repaying a Bonus in an Agreement

Does a nurse practitioner have to pay back their bonuses if they terminate their contract early? The answer to this is normally 99% of the time, yes, you will have to pay back either a portion or all your bonuses. Let’s first talk about what kind of bonuses there are. Typically, there is some type of sign-on bonus. It can be called a signing bonus, or a sign-on bonus. Sometimes it’s relocation expenses, but it’s given to you a lump sum at the time that you either sign your employment agreement or at the time that you commence, which means start your employment, so like your first day. Those are the bonuses that are offered to you. Now, the reason why you get these bonuses is to attract you to become employed with the employer and provide your services.

So, it’s great. It’s exciting. And normally, there are significant amounts of money anywhere from 10,000 and up, but the thing you need to know, and you need to read very carefully, there is always some type of strings attached to this sign-on bonus because it also helps your employer retain you to keep you there. There’s normally some type of payback provision, and it normally states anywhere between one to three years, you must have continuous employment with the facility. Otherwise, you have to pay back either the entire bonus or the bonus at a prorated amount. So, for however many months you’ve been employed, that portion will be forgiven off that bonus. Some things you want to really consider before you sign your employment contract are if you receive this money at the beginning of your employment as a bonus, it is considered income and therefore it’s taxed as income.

Employment Agreement Bonuses

Let’s just say, they’re offering you a $10,000 signing bonus, you sign, you receive the money. You won’t receive the full 10,000 because taxes will be taken off the top as they do normally with income. However, let’s say you want to leave within a year and your contract agreement states that you must pay back your entire signing bonus. They mean the full 10,000. They don’t mean the amount minus any taxes that you’ve paid. So, this is something that you really want to consider. I always recommend either limiting the amount of time like down to a year before the amount is forgiven or asking it to be prorated as I talked about before that every month a portion of the bonus is forgiven. Sometimes you have to sign something called a promissory note. It’s almost structured like a loan. They’re going to loan you this amount of money.

And if you leave before and you have signed that promissory note, they can come after you for that money. And normally, on the promissory notes, there’s some type of interest. So, if you don’t pay back within 30 days of your termination, they can tack on anywhere from 12 to 15%. Again, these sign-on bonuses are attractive, but you want to make sure that you read your employment agreement very carefully to know how long you have to be employed with the practice before this amount is forgiven.

Non Compete vs Non Solicit with a Physician Practice

What are the differences between a non-solicitation clause and a non-compete clause in a nurse practitioner employment agreement?  To start, both the non-solicitation and non-compete clauses are typically located in a similar spot in your employment agreement. And it’s normally under the restrictive covenants. Restrictive covenants just mean it’s a promise not to do something. So, you’re promising not to solicit either patients or employees after you leave. And then a non-compete clause is you’re just promising not to compete with your employer whom you have terminated your agreement with. Let’s start with the non-solicitation clause. The non-solicitation clause has about three parts. The first part is how long you are restricted. Normally, a non-solicitation clause is going to be a one-year restriction.

That’s what we mostly see within our practice. You’re going to be restricted for one year from soliciting or reaching out, enticing, or trying to poach former patients or former employees. And what does this mean? It means you can’t reach out to them directly. Now, if you are leaving, you can absolutely let your patients know that you’re leaving, you can let employees know that you’re leaving if they ask you where you’re going. You don’t have to withhold that. You can absolutely let them know. You just get in trouble with these clauses, and you would be violating it if you’re reaching directly out to those patients like sending letters to them stating, this is where you’re going, and if they want your services, they can come with you. That would be in violation of a non-solicitation clause.

Another part of the non-solicitation is who is restricted. As we said, patients, former patients, sometimes it’ll say if they’ve been a patient within the last year prior to your termination, something like that. And then employees. You want to be careful with the employees because sometimes I have seen in non-solicitation clauses, you want to read them carefully, sometimes you’re prohibited from hiring former employees. Now, that’s tricky. That means if you’re opening your own practice, you’re restricted from hiring them. That’s even like even if you don’t reach out to them. So, you want to make sure you’re reading your employment contract very carefully. Now, general advertising. If you’re advertising to the masses, billboards, and social media commercials, that’s not really considered, in my opinion, soliciting those former patients or employees.

It’s just a general advertisement. You’re letting people know that this is where you are, and these are your services. If you have a mailing list and you’re directly targeting former employees or former patients, then you’re probably going to get in trouble with the non-solicitation clause. The other thing you should be aware of is sometimes in the non-solicitation clauses, it says you cannot solicit directly or indirectly, and they don’t really define what indirectly means. You want to be careful there because that’s a very vague term and that you’re protecting yourself. That’s something clients ask to get defined a lot from your employer. So, that’s the non-solicitation clause. You’re restricted for a period from reaching out, soliciting, or enticing patients to either come with you for your services or employees to become employed by you or with you.

Now, the non-compete clause is a little different. There are normally two parts to the non-compete clause. One, you’re restricted for a certain period. That’s stated, and again, that’s normally one year, but I have seen it try to go up to three years. In my opinion, anything over one year is unreasonable. So, you’re restricted for a period from providing services within a certain area. And normally, it’s within a radius of miles, sometimes it’s city blocks, depending on your state law. I’ve actually seen counties or parishes, but it just depends. So, for a period, you’re restricted from a certain area for providing your services. In the non-compete clauses, you want to be careful because you want to know what locations that restricted area is attached to. Sometimes it can be multiple locations.

In my opinion, it should always be only your primary location where you yourself are located, your home base. But sometimes, though, they can attach if you provide services at any location. So, if you fill in for someone while they’re sick or on vacation, that non-compete then attaches to it. And then lastly, sometimes I have seen companies that state any location of where they have a practice, then you’re restricted. And you want to be careful there because you’re restricted from areas that you’re not even providing services at. So, again, always read your employment agreement very carefully. Non-solicitation and non-compete clauses are normally enforced the same way.

It’s normally called equitable relief, which just means that your former employer would bring your employment contract before a judge. If they found that these clauses were enforceable, they would sign an injunction or a restraining order, which just means that there would be a court order that you could not work within that area, or you could not solicit those patients or employees.

Consultation with Chelle Law

When your contract is reviewed by an experienced attorney, you will find great financial benefits which end up outweighing the cost of the review.  If you are in need of assistance with an employment agreement or contract review schedule a NP Contract Review with Chelle Law today!