What should go into a dental associate’s termination letter? Suppose a dental associate has decided to leave a practice and they’re terminating the contract. What needs to go into that letter? Let’s first talk about termination. There are several ways of terminating a contract. One, the term could end if there’s no automatic renewal. And then, after that period, if the parties haven’t decided to renew the contract, the contract ends, and they move on. You don’t need a termination letter in that scenario. Suppose the parties mutually agree to end the contract for whatever reason. In that case, you will not need a termination letter.
Principal Methods of Dental Associate Contract Termination
There are two scenarios where you would need a termination letter. Either with-cause or without-cause termination. With-cause termination, one of the parties is in breach of contract. And from the dental associate’s perspective, let’s say the employer agreed to pay a bonus, and they’re refusing to pay it for whatever reason. The dental associate would send them a letter that states you are in breach of contract due to this. And then there usually is a cure period where somewhere between 15 to 30 days, the party has an opportunity to cure the breach to fix whatever the problem is. And in this scenario, if the employer ultimately pays the bonus, the dental associate couldn’t terminate the contract for-cause. Now, without-cause termination is most terminations; probably nine times out of 10 is due to without-cause termination.
What Does That Actually Mean for the Employee?
Without-cause termination means either party can terminate the agreement at any time with a certain amount of notice to the other party. Most of the time, it’s somewhere between 30 to 90 days. Let’s say dental associates are out of practice and may have a better opportunity elsewhere than investigating the termination section of their contract. And then it’s going to say that you must provide 60 days written notice to terminate the agreement.
You would then have to work out those 60 days, and then at the end of those 60 days, you could move on. In this scenario, you would have to write a letter and then provide it to the employer. And then, at the end of that notice period, you could move on. Let’s talk about the details of a termination letter. In any contract, there’s going to be a section that’s called notices or notices.
Notice Period in Contract Agreements
The contract’s notice period section will state how a party can give proper notice to the other party. To provide adequate notice, you must either Deliver by hand or send it via certified mail, fax, email, or whatever. It must be a written letter that states I’m terminating the contract. So first, you need to look in that notice section and see precisely how you can give effective notice. If you don’t give adequate notice or verbally tell the owner, usually sending an email is not considered practical. The owner could make you wait longer until you terminate it properly. In this case, if you must send the letter, you figured out how to send it via certified mail. What needs to go in the letter? The letter of terminating a contract without-cause is not a time to air grievances.
The Ideal Nature of an Employment Termination Letter
I know when I speak to dentists, they’re always unhappy. They want to put down all of the reasons why they’re unhappy, all the reasons why the employer is terrible at business, and they’ve treated them unfairly. They want to relieve the problems. Don’t do that. I know it probably would feel good to do that. There are zero benefits to the dentist from doing that. I would prefer it if you put it simply, and I am terminating the agreement via this section.
I must give 60 days’ notice; here is my notice, my last day of work will be this date. Thank you for the opportunity, signed, Dr. Dentist. That’s it. Short and sweet. I’m terminating the agreement per this section. Thanks for the opportunity. Last day of work, nothing else. If you were to write a two-page airing of grievances, you would burn bridges with that employer. But word could get out that there were significant problems, and you could be labeled as a malcontent.
If you keep it short and sweet and don’t get into all the problems, none of them will follow you into a new job. I understand it may feel good. I suggest, Don’t do it. Keep it short and sweet, send it to the employer, and then move on. It’s not uncommon for a new employer to call your last employer. And suppose you had that scenario happen, and you just blasted them in this letter. In that case, that employer will not give you an excellent recommendation. Whereas if you say I’m moving on, thank you, there’s not a lot negative that they could say unless there were significant friction while you were there, but it just doesn’t make sense. So, you obviously can’t terminate the contract without-cause. It must be done via written letter, and don’t mess up your future by burning a bridge with the old employer.
Other Blogs of Interest
- What Should a Dentist Put in a Termination Letter?
- Difference Between a Dental Associate Offer Letter and a Contract
- What Should I Look for in a Dental Contract?
How do you Terminate a Dental Associate Contract Without Cause?
How can a dental associate terminate an employment contract without-cause? Let’s first talk about the basics of terminating a contract. There are four general ways of terminating an employment contract.
The Initial Term Expires, and There’s No Renewal
In the contract, it’s usually going to state how long the contract lasts and the duration of it. Usually, it’s somewhere between one and three years. However, I’d say more and more contracts will have no fixed term. They’ll go on forever unless terminated by a party through one of the three ways we’re about to talk about. So, look at how long it lasts and whether it automatically renews. If it does, it’s usually for one-year terms, and then we continue until terminated. That’s the first way a contract can be terminated.
It would help if both parties said, “Hey, it’s not working out.” It would help if you didn’t give us any notice. Let’s wash your hands of it and move on. That’s fine. So, either party can terminate by mutual agreement. The third way is “with-cause termination.” If one party is in breach of contract, they must provide written notice to the other party. Then that party would have a certain amount of time to fix the breach. They will do that during what’s called a “cure period.” A cure period allows one of the parties that’s accused of being in breach of contract to fix whatever the problem is. Usually, it’s 15 to 30 days.
With Cause Termination
Let’s take monthly bonuses paid to a dental associate with productivity-based compensation. And the employer isn’t paying the monthly bonus, even though it’s been earned well. The dental associate could give them written notice that says, “Hey, you’re in breach of contract.” You’re supposed to pay me my monthly bonus, and you’re not. If you don’t fix this within 15 days, I can terminate the agreement immediately for-cause. With-cause termination is the third way.
Terminating Employment via Without Cause Termination
Now, this blog aims to show how the dental associate terminates the contract without-cause. So, this is the most common way of terminating a contract. In any dental associate agreement, you must make certain there’s no-cause termination, and I’ll say why. Typically, it would be somewhere between 60 to 90 days. That means either party can terminate the agreement at any time with a certain amount of notice to the other.
As I said, somewhere between 60 to 90 days is a kind of industry standard. In that scenario, let’s say a dental associate got a better job offer and wanted to move on. They give the practice a letter stating I am using the without-cause termination section in the agreement to terminate it. I will work the 60 days as required. And then, at the end of that, I’ll terminate the agreement, the contract terminates, and both of you can move on.
Employment Agreement Red Flag
It is an enormous red flag if you have a dental associate contract that does not have without-cause termination. And why? If you can’t get out of a contract, you’re stuck for as long as the term. So, if it is a three-year contract and there’s no without cause termination, you must stay for the three years, no matter what. Now, why would you want to leave? Let’s say the volume would be this amount, and it’s not, and you’re paid on pure productivity. You’re getting paid a quarter of what you expected, or maybe the hours are bad, the calls are bad, or there’s a lack of staffing.
Which makes you completely inefficient, or maybe the practice owner is just a jerk. You don’t enjoy working with him. There could be dozens of reasons you’d want to leave an employer, but if you can’t terminate the contract at any point, you are stuck. Why would an employer not have without-cause termination in their agreement? Well, the first thing is they’ve had an enormous turnover. People keep leaving. And so, they’re trying to ensure that someone can’t leave before a period. That’s kind of the first thing that I look at when I see no without-cause termination.
What if There Is No Without Cause Termination in the Contract?
Now, it’s rare it wouldn’t have without-cause termination. But if it’s not in there, it’s usually because the employer is probably a bad manager, a terrible business person, or whatever. And they can’t keep people on staff. And therefore, they’re trying to secure them for a period. So, no matter what, you want without-cause termination, somewhere between 60 to 90 days. Now, why that amount of time? In any healthcare professional, there needs to be continuity of care. It needs to be considered.
So, there need to be arrangements to either hire a new dentist to take over or refer the patients out to someone else. That’s why there needs to be a little lead time to ensure continuity of care. It is paramount to the termination. Well, that’s about it for without-cause termination.
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 terms, I mean, the contract’s length and then termination, so how that contract ends. Let’s first talk about the term of the contract.
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 terminated 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 own 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 terminates. 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, standard 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 agreement, or maybe the timing. Also, the payment of bonus is involved, and there is disagreement over the professional owed amount. That’s always a big, I guess, the 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 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 agreement immediately. In most employment contracts, the last and most common way is without cause termination. There’ll be language that states that either party can terminate the 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 Laws
Just because an employee terminates the contract doesn’t mean it necessarily completely 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 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 restriction? 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 has the option to terminate the 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 important discussions and things employees could negotiate before signing any employment agreement. Hopefully, that was helpful—kind of a little 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 contract, 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 need to 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 state 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 effective 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 effective notice. So, that’s the most important part. You need to look in the notices section and determine if the proper way to terminate the 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 big 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 effective 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.
Can an Employee Terminate a Contract at Any Time?
The short answer is probably. However, it’s going to depend upon the language in the contract. There are ways that an employee can terminate an agreement: one, if there’s a fixed term, meaning a one-year, two-year, or three-year contract, and there’s no language that states the contract automatically renews, then at the end of that fixed term, if neither party is going to go or decided to sign another contract, the contract terminates, both parties can move on. That’s it. That’s one way on the agreement that can terminate a contract. Two, through mutual agreement. Maybe it’s not working out, and both parties are like, you know what? Let’s move on. You can mutually agree to terminate the agreement. Three, for the cause. In any employment contract, there will be a section called termination. In that section, it’s going to state how both parties can terminate the contract.
Employee Contract Termination Without Cause
Without-cause termination is going to be. If one party breaches the contract somehow, how can the other party terminate the contract for the breach? And in most of the for-cause termination clauses, it’s going to state if one party believes the other party is in breach, they must give them written notice. And then that party usually has a period to fix the breach. We called that a cure period. Usually, it would be somewhere between 15 to 30 days. Maybe the employee wasn’t getting paid a bonus that the employer said they would. The employee lets the employer know: you’re in breach of contract, you have 15 days to pay me my bonus, or I can terminate the agreement immediately.
The employer can no longer terminate for-cause if the employer does pay the bonus. And then they could go to the last way of terminating the contract without-cause.
Termination Notice Period
In every employment contract, this is very important. There should be a without-cause termination. This means either party can legally terminate the agreement at any point, for any reason, with a certain amount of notice to the other party. Normally, that notice period will be between 30 to 90 days. Why is this important? Suppose an employee takes a job and maybe they were lied to by the employer. In that case, if they’re on a production-based compensation from collections, commission, percentage, encounters, and healthcare RVUs, it doesn’t matter. But suppose an employee agreed to the contract and was given no guaranteed base, daily rate, or guarantees at all. In that case, the volume is not nearly what they expected it to be or what the employer said it would be. They don’t have a way to get out of a contract without-cause.
The workers won’t have an exit in that job for whatever the length of the term is. That’s not something you want. You always want the ability to get out of the contract with a certain amount of notice in the scenario where the job isn’t what you expected. Maybe your boss is a terrible manager, or they’re placing you in a territory or location you don’t want to be assigned. I mean, hopefully, the employee could check on those in advance of signing the employment agreement. Sometimes, they’re not. Sometimes the employer just straight-up lies to the employee and says, oh yes, all these things are going to be there, and they’re not. Without cause, employees can insulate themselves from being stuck in a terrible situation for a long time without recourse.
Safety When You Need to Terminate an Employment Contract
So, can an employee terminate a contract at any time? If they have without-cause termination, remember that they must work the entire notice period. Like I said before, if it’s 30 days, give notice, work 30 days, and leave. Suppose you were to leave before the end of the notice period. In that case, the employer could theoretically have damages and sue you for lost profits, recruiting, or replacement. So, if you have a notice requirement in your contract, you want to make certain that you give the proper amount of notice, work it out, and then move on and find a new job.
How Do You Terminate an Employment Contract?
How do you terminate an employment contract? There are several ways of doing it. If there is a fixed term, let’s say it’s an initial two-year term, and then there’s no language where it automatically renews. If no one decides to renew the contract, it ends in two years. That terminates the contract. The employer and the employee can move on. It is very rare. There’s almost always going to be language there that has automatic renewal. If they have an initial two-year term to the contract, it’ll just state that if neither party terminates the agreement. It’ll automatically renew for successive one-year periods.
In that scenario, when there are automatic renewals, the contract terminates in three other ways. One is mutual termination. Both parties say, for whatever reason, this isn’t working out, we’ll terminate the agreement, and we can move on. The second way would be for cause. In the contract, there’s to be a list of reasons a party can terminate the agreement. And then there’s also going to be language that states if that party thinks the other party is in breach of contract, they’re not fulfilling a term of the agreement. It’ll usually state that the party must send written notice to the other party saying you’re in breach of contract. And then, normally, there’d be a cure period. And that means the party has a certain amount of time to fix whatever the breach is, usually between 15 to 30 days.
What Happens If the Breach Is Not Fixed?
And so, if that party fixes the breach, the other party cannot terminate the contract for-cause. Some reason you can terminate a contract for-cause is compensation. Maybe the employer isn’t paying as much as they stated they would, or they’re not paying on time. There’s a miscalculation of a bonus. In that scenario, the employee would say, “Hey, you told me you would pay me this much based on the documents we signed.” You’re not paying me this much. You are in breach of contract. You have a short period to make it right regarding payment. And if you don’t, I will terminate the contract for-cause. And in that scenario, normally, that would mean the party could terminate it immediately after the cure period ends, and the other party didn’t fix the breach.
What Practice Can Cause an Immediate Contract Termination?
In healthcare professions, a physician or any healthcare provider loses their license. They’re uninsured, can’t be given malpractice insurance, are on some exclusionary lists, and get a felony. In those scenarios, there’s no chance that they can continue working as a physician. And then, the employer would have the opportunity to terminate the employees immediately for cause. Those are some scenarios for cause termination.
Languages on a Without Cause Termination
The last way to terminate an agreement is without-cause termination. In that scenario, it simply states that either party can terminate the agreement for any reason with a certain amount of notice to the other party. Usually, somewhere between 30 to 90 days, depending upon the profession. Healthcare professions tend to be a little bit more. There is continuity of care issues with patients.
In contrast, maybe some executive sales, that type of thing, is much less because there’s not as big of an ethical or medical problem with the transitioning patients. They don’t have to worry about that. Let’s say someone has a 30-day without-cause termination. That party provided written notice to the other party. Hey, I’m going to terminate the agreement. Under the contract, I’ll work out my 30 days. At the end of that, I’m moving on. That’s how most contracts terminate without-cause. Now, some things to think about if it is without-cause termination.
First, language should state how the employer will pay the professional after the contract terminates. Maybe they have a yearly bonus, quarterly bonus, or monthly bonus. Will the employee receive those bonuses after termination? If not, then some strategy needs to be utilized. They shouldn’t give notice until after they’ve received whatever the last bonus is to make certain there are not some shenanigans on the employer’s part. In most scenarios, if a provider or professional gives without cause termination notice, there’s also language that states the employer can state, you must go home. It would help if you didn’t work here anymore. However, the employer does have to pay out whatever that notice period was. If there were 30 days, the employer would still pay the professional for his labor, whatever their base was for those 30 days.
Ensuring that Professionals Get Their Bonus
But when there are bonuses involved, it gets a little bit trickier. And so, you want to ensure that there’s a language of information that protects the professional and ensures they get their bonus. Some ways of doing that would be putting information in the language that states that the bonus if earned, will be prorated based upon where they are in the contract year. So, let’s say someone has an end-of-a-year bonus; they’ve made it through six months. They give notice so that compensation will then be proportional to the kind of yearly bonus for those six months.
So, those are the ways that both parties can terminate a contract. Either the term ends, mutually terminated by the parties, or breach of contract. Suppose the cause of termination of someone doesn’t fulfill the contract’s terms or without-cause termination. In that case, either party can terminate the agreement. Any time, for any reason, with a certain amount of notice to the other. To explain this further, consider contacting an attorney.
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Contract Review, Termination Issues and more!