There are two main distinctions. A professional could receive an offer letter, and that’s it. No employment contract follows. It’s just you agree to the terms of the offer letter, and then you start the job. And then, the second way would be the employer asking the potential employee to sign an offer letter, agreeing to basic terms. And then, they’ll incorporate those terms into an employment agreement and offer the employment agreement to the prospective employee. Then that person must decide if they want to sign the employment agreement and move forward with the relationship.
Let’s first go with if you begin an offer letter with no employment agreement to follow. In that scenario, you’re most likely in an at-will employment relationship. This means that the agreement or the employment relationship may terminate at any time, for any reason. This is with no notice unless specifically stated in the offer letter. For the most part, there wouldn’t be any restrictive covenants that follow when the employment relationship ends. Restrictive covenants could include a non-solicitation agreement and a non-compete.
Those are the two most common or the two that matter the most for most employees. They provide you with an offer letter that goes through basic things if you negotiate. Such as compensation, benefits, and start date, and that’s about it. I would say most licensed professionals usually would sign employment agreements. Attorneys don’t, for the most part, but almost anyone in healthcare, physicians, nurse practitioners, PAs, vets, chiropractors, and dentists, always sign employment agreements.
Not Required to Take on an Offer You Signed
Let’s say you’re in another situation where they give you an offer letter, and you agree to the terms. Then they’ll follow up on the employment agreement. Many people ask, alright, what if I’ve signed the offer letter? But when they give me the employment agreement, it doesn’t look great. Do I have to go through with the job? The answer is no. Unless there’s strange language in the offer letter that states it’s binding, which would seldom happen if they follow up with an employment agreement. You can still negotiate terms.
Let me give you an example. Let’s say the offer letter states there’s a non-compete, but it doesn’t have any details. So, you get the contract and then look in the non-compete, and it’s five years and covers an entire state. Like you will have to move out of the state if you want to continue in your profession. Well, that’s not a reasonable non-compete. But that could make a job that may have looked great at a hundred thousand a year be only worth 200,000 a year. That is if you accept that terrible non-compete.
Provide Context for Disputing Job Offer
Even if you’ve accepted the terms of the offer letter, it doesn’t mean you have to go through and execute the employment agreement. The employer will probably talk about you agreeing to the terms, and now you’re returning to us. So, it is most effective if you provide some context as to why it looked good initially. Still, after reading the actual details of the employment agreement, it’s not so good.
I think most smart employers can understand that and appreciate that. If you just come back at them and say, no, now I want to double the salary, the bonus, or whatever. Without providing context, I assume the employer will not be pleased with that and may even pull the offer. So, what happens when you sign an offer letter? First, an employment agreement will likely follow, and then you’ll have to determine if you want to go through with that, or they’ll give you the offer letter. It’s an at-will relationship; you can leave at any time, and there likely aren’t any strings attached.
Other Blogs of Interest
- What Benefits Should Go In a Physician Assistant Offer Letter? | PA Offer Letter Benefits
- What Benefits Should be in a Nurse Practitioner Offer Letter? : Nurse Practitioner Benefits
- Can a Physician Back Out After Signing an Offer Letter?
Can an Offer Letter Be Revised After Accepting?
Can an offer letter be revised after signing it? In short, yes, it can. There are very rare times where an offer letter, also known as a letter of intent, would be binding upon a professional. I mean, it would need to explicitly state that the terms of the offer letter are binding. And normally, in that case, it would be something in academia and much more detailed than just a normal employment contract. I can’t recall a time where an offer letter said it is binding with an employment agreement to follow that would also be binding. And there are several reasons why most employers don’t do that. Well, first, from the employee candidate side, when you receive an offer letter, it will break down the basic terms of the employment relationship.
When a Job Proves to Be Something You Didn’t Expect
Some of the basic terms of the employment relationship are as follows:
- The compensation
- The length of the term
- How long does the contract last
- How it will terminate
- Some of the benefits
- Malpractice insurance
- Restrictive covenant
- Non-compete clause
- Non-disparagement confidentiality.
It’s basic terms. An offer letter is normally a page or two at the most. A normal employment agreement is at least 20 pages and could be longer. It’s just basic terms. Now, if you look at basic terms and say, you know what, that’s a great salary. I’m okay with that. I’ll take it. And maybe it just says it has a non-compete but doesn’t have the actual terms. And then you agree to sign the offer letter when you get the employment agreement. Having some context provided, having some specific language provided, could change from a contract you thought would be great to not so great.
And let me give you an example. Let’s say, in the offer letter, it says, yes, there’s non-compete. But it doesn’t have any terms. Then you look at the actual employment agreement. The non-compete lasts for three years and a hundred miles from your primary practice location, sales territory, or whatever. That job where the comp looked great, maybe the benefits look great. If the non-compete forces you to move from your current community, that may be a deal-breaker for some people. Maybe you can go back to them and say, hey, I’d like the terms of this non-compete reduced. This is not what I was expecting. It’s much more restrictive than normal. And for me to feel comfortable signing this agreement, we need to change these terms.
Contextualize Reason for Negotiation
Now, the terms may not have been in the offer letter, but you want to get the terms changed obviously before you sign the employment agreement. What if they say no? Let’s say they say, no, we’re not willing to change the terms of the non-compete. Well, you could go back to them and say, I know we already agreed to a base salary. However, if I accept the terms of this non-compete, it’s not worth what I agreed to originally. It’s worth a hundred thousand more for me to agree to this. And so, although we originally agreed on the base salary in the offer letter. I’m not okay with that now. I’m not going to accept that now. And suppose you want me to sign this employment agreement.
In that case, we will need to change the compensation structure and benefits. That’s fine. It’s legal. They may be upset. They may tick off. But when you do something like that, you will come back at them and renegotiate already negotiated terms. For those listed in an offer letter in applying for jobs, you need to provide context and reasoning for why.
And non-compete is a good example. I didn’t have the terms of what it would be. Now that I see those specific terms, I’m not okay with it. And this is the reason why I want changes to other things. I think any savvy employer is going to understand, okay, well, I mean, that makes sense.
Don’t Settle for Uncomfortable Terms
Now, they may not be willing to make any changes. And as I said before, they may be slightly upset that you’re coming back at them. Still, I would never suggest that a professional should ever sign an employment agreement with terms they’re not willing or comfortable with. Not because they signed an offer letter and agreed to the terms of an offer letter. Unless it says it’s binding, it is not binding. You can still negotiate terms even though you signed an offer letter. And even though you negotiated them originally. In looking for jobs to settle in, it is much better to tick off an employer and maybe reach terms than just accepting terms you’re not happy with.
If you take on a job and feel like you’re not getting compensation properly. Or you are concerned about one of the restrictive covenants. Most people don’t last that long in those positions. You want to feel good going into a new job. One piece of advice is, if you don’t feel good even if you’ve signed the offer letter, don’t go through with taking on the new job and starting a new position. Start with the next reasonable opportunity you can find.
Can You Negotiate After Signing a Letter of Intent?
Can a professional negotiate after signing a letter of intent? In short, yes, obviously, you can. Let’s talk about what is a letter of intent. The differences between that and an employment contract, and then the areas of negotiation after that. A letter of intent is a brief letter that outlines the main terms of the employment relationship. Normally, it would be the term of the agreement. So how long it lasts, if there’s without-cause termination, what the notice requirement is, any kind of compensation detail like base salary. Maybe some productivity, commission-based, net-collections will be in there.
Maybe a brief description of the benefits: health, vision, dental, life, disability, retirement, that type of thing. And then, if there are any restrictive covenants, a non-compete, a non-solicit, something like that. And if they’re a healthcare provider, if there’s what malpractice insurance offers, and if they must pay for tail insurance. There’s just a brief description of the main points of the contract. And so, the employer, if they do, make the professional sign a letter of intent in advance. Once they get those locked in before offering an employment contract, many employers will go straight to the employment contract. Maybe they’ll have a brief discussion with the potential employees about, alright, here’s what we’re thinking about all those things. And then, if there is verbal agreement from the professional, yes, I’m okay with those.
Assessing Whether an Offer Is Worth It or Not
Let’s move forward with an employment agreement. The employer will then present the employment agreement, and negotiation can occur. Suppose you have agreed on the terms of an offer letter or a letter of intent. In that case, you certainly can negotiate once you receive the employment contract for several reasons. Suppose the offer letter briefly describes the employment relationship terms when you have seen the actual language many times. In that case, it can completely change what you were expecting. For instance, if it says there will be a non-compete in the agreement, it doesn’t give the description. Then when you read the terms of the non-compete. Instead of expecting maybe a one-year non-compete with a 10-mile radius. It’s a three-year non-compete with a 50-mile radius.
So, that substantially changes whether an offer is worth it or not. And many times, if there is bad language in the agreement. It can also shift the compensation and benefits. For instance, let’s say a professional is okay making 200,000 a year. Still, then they have these bad restrictive covenants after the contract ends. Two hundred thousand may not be worth it for them. Maybe they’ll say, if I’m going to accept these restrictive covenants, then I need more compensation during the year to make it worthwhile for me. However, you’ve decided and reached an agreement on the terms of the offer letter. It doesn’t mean that you can’t go back to the employer. Unless it specifically states in the offer letter or the letter of intent that it is binding, it rarely happens.
Risk Ticking off the Employer
Normally, that would only happen in maybe an academic position. You’re free to negotiate up until signing an offer or an employment agreement. Now, it may tick off the employer that you agreed to essential terms. And then, after the fact, you came back at them and said, I know we agreed to this, but we need to revisit this. However, no professional wants to enter an employment relationship where they’re unhappy with the terms. I find it’s much better to risk ticking off the employer with terms that favor the employee versus just accepting an agreement that you’re unhappy with. And usually, that’s going to spiral. Let’s say I agreed to the terms in the job offer letter. It does change once I read the actual employment agreement.
And then, at that point, I’m like, ah, I don’t want to go back to them. I’m just stuck with it. Well, you’ll, or at least you will likely have, some negative attitude that spills over once you begin with the employer. And maybe you’re always thinking, ah, I’m underpaid, or this non-compete is bad, or the benefits are below what I was expecting.
So, even if you risk the employer being annoyed by continued negotiation. The professional is free to continue, and they should. The bonus structure is good if it’s a reasonable offer and the salary is good. Then you continuously come back to the employer asking for more and more. At some point, they’ll yank the offer and move elsewhere. That’s always a consideration when talking to a professional about negotiating a contract. Yes, we want to ask for more, but it needs to be reasonable.
Negotiating With Reasonable Demands
Suppose you’re asking for insane increases in certain things many times. In that case, I can tell the professional that if you come back at them with these things, they will say no. They’re likely going to yank the offers just because you’re coming off as unreasonable. So, it’s good to know the industry standards in all those terms. That way, when you ask for the increases, you have some backing of, these are the industry standards. And suppose you don’t want to meet the industry standard. In that case, I will move on and continue looking for jobs for better opportunities. So, yes, you can negotiate after signing a letter of intent or an offer letter. And, in fact, you probably should. Once you read the language of the employment agreement, it changes the opportunity. It can help you immensely in your career.
Can You Reject a Letter of Intent?
Can you reject a letter of intent? The quick answer is yes. You certainly can, and should, if you’re unhappy with the terms of it. A letter of intent, also known as an offer letter, can be provided once negotiations or discussions about a position move forward. Normally, it would work if a potential candidate would find out about a job. Either through a job listing or word of mouth or maybe they were reached out through a recruiter. There’s a discussion of the main point of the position. Like the salary, benefits, that type of thing, and location. And once there’s interest on both sides, many employers will offer the letter of intent or the offer letter.
And that is a description of the main points of the employment relationship. In most offer letters, there will be the start date, location, and contract length. This is called the term, maybe a brief discussion on how both parties can terminate the contract, compensation, so is there a base salary? Are there bonus opportunities? Is it net-collections, or commission-based RVUs? It would be a brief description. It wouldn’t go into a long four paragraphs about comp. If malpractice insurance is necessary, who pays for that, and then who pays for the tail insurance if that’s necessary? Are there restrictive covenants? The restrictive covenants are normally a non-disparagement, a non-solicit, a non-compete, and it might go through briefly like this is how long go last.
What Is Inside an Offer Letter?
And maybe this is the geographic restriction associated with the non-compete and then a brief description of the benefits like health, vision, life, dental, disability, retirement, and maybe expenses. What expenses is the employer going to pay for? That’s what would normally be in an offer letter. The candidate, when viewing this letter, if the terms of it are unfavorable, or maybe not what the candidate was looking for, they can say, no, I’m not interested in this. I’m not going to sign this. I wouldn’t suggest just saying, no, I’m not taking this job. Take a hike. It would simply make sense to counter. You can say, I’m not going to sign this offer letter. However, these things would make this opportunity good for me.
So, if you’re offering a 200-base salary, then maybe I want 250 or a signing bonus of 10,000, and I want a 20,000-signing bonus. And will you provide relocation assistance if I move into a new city? These are all things that employees should do at this stage. And even though a professional gives an offer letter. It doesn’t mean that’s the end of it. And then, even further, if you come to terms with the offer letter, what will then follow will be an employment agreement. Even if you sign another offer letter unless there’s the language that says this is a binding offer letter. You can change no terms, which you will never see. Once you get the employment agreement, you can still negotiate terms.
Why Is It Important to Understand the Industry Standards?
So, you need to think strategically, alright? I would suggest never signing an employment agreement that you’re unhappy with. Even if you reject the offer letter and decline the employment agreement, it doesn’t mean that the negotiation is over. Suppose the professional is reasonable in what they’re asking for. In that case, I find most employers expect at least some negotiation when they’re bringing in new candidates. I mean, it is the expectation. But once again, if they’re reasonable. Suppose someone is asking for a 200% increase in base salary. In that case, the employer is likely going to, look, you are delusional, and we will move on to a different candidate. So, it helps the professional understand the industry standards in their profession. That way, they can ask for reasonable changes to the contract. There are also many times when you’ll get brief details in the offer letter.
Then when you see the actual written language in the agreement. It substantially changes what it looked like in the offer letter. Maybe if it just briefly mentions there will be a non-compete. Once you review the employment agreement, it’s a terrible non-compete. Maybe you are expecting a one-year non-compete, and they offer three, or you’re expecting a small geographic radius of 10 miles. They came back with a hundred, or something like that. That can change from “yes, this is a great offer” to “there’s no chance I would ever accept this job.” So, there can be negotiation throughout the process until the professional signs the employment agreement. At that point, those are the terms. It would be best if you made certain before you sign anything that you’re okay with what is in agreement. Then understand there will be obligations after the employment relationship ends.
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