What Should be in a Termination Agreement Letter?
What needs to go in a termination letter from an employee? If employees decide they no longer want to work for the employer, what to put in that letter? First, we have a few things to discuss regarding terms and termination. The term is the length of the contract, and it should be specified. It could be one year, two years, or three years. Then there’s normally a language that would say it would automatically renew for one year after that. More and more, there are evergreen contracts, which just means there’s no initial term specified. It just says the contract goes on forever until terminated by either party.
What Form Should a Contract Termination Letter Take?
After that, you need to identify how to terminate the contract. There are a couple of ways to terminate an employment contract. If it’s a fixed term, two years, no possibility of renewal, it ends, and that’s it. You don’t even need to send a letter. Then, mutual agreement. This isn’t working out if both parties approach the other. We don’t need to give notice. Let’s move forward. You don’t need a termination letter there. For cause means someone is in breach of contract. The contract will usually require written notice saying, hey, you’re breaching the contract. And then there’ll be what’s called a cure period. It means there’s a period for the employer to fix the breach or the employee. And if able to fix the breach within that period, it’s usually somewhere between 15 to 30 days. The contract reverts and the party couldn’t terminate for cause.
Contract Termination Letter When a Breach Has Occurred
If there was a breach of contract, let’s do this from the employee’s perspective. They would first send a written letter stating you are in breach of contract. And then, if there’s a cure requirement, you have 15 days to fix this breach. If it fails to fix the breach, the employee’s option is to terminate immediately. In that scenario, the employee would send another letter stating he failed to fix the breach. I’m terminating the contract immediately. Thank you. And that’s it. Once again, in the initial letter, you need to state the reasons for the breach of contract. And then, in the second letter, if they failed to fix the breach. Just state, hey, you didn’t fix this. I’m moving forward.
You don’t need to put a list of grievances or all of the problems with the employer. Just say you breached; you didn’t fix it. And give the details about the breach and then move on. Now, that’s rare. The most common way to terminate a contract is without-cause. Almost any employment contract has a statement saying. Suppose either party wants to terminate the agreement at any time. In that case, they can do so with a certain amount of notice to the other party. 30 to 90 days, anywhere between, is standard for without-cause termination notice.
In that scenario, that’s where the termination letter would come into play. Let’s say the professional has a 60-day notice. They write the letter, they say per the agreement. I’m giving you 60 days’ notice. My last day of work will be X date. Thank you for the opportunity. I’m moving on. Once again, this letter is not the time for an airing of grievances or all the problems.
Keep Your Contract Termination Letter Short and Simple
Putting all of that down on paper is no benefit to the employee. It needs to be short and sweet. I’m exercising my right to terminate the agreement without-cause. I’m providing you with this amount of notice as required. My last date of work is this. Thank you for the opportunity. Good luck. That’s it. There are zero benefits to burning bridges to pointing out all the flaws in the employer. I know many employees feel like I just wanted to say my piece. It’s not a good idea for a couple of reasons. At that time, that job may stink because of management, mismanagement, the people you’re working with, the opportunity, whatever.
And if you sense some nuclear bomb letter and destroy the relationship, what if something happens down the road? What if the manager changes? What if they move into new territory? Or what if someone buys them out? If you’ve nuked those relationships, that opportunity may be much better. Now, it’s a bad look, and you may have lost out on being able to go back. That’s one reason not to do it. And the second one is that there’s simply no benefit. If you’re moving on, move on. It feels good for the employee to get all that stuff out. But when it’s written, it’s forever. And so, they’re going to have that letter. They’ll probably show it to other employees or management if it’s bad. And it just makes the employee look bad.
So, keep it short and sweet. Say, this is the contract section, I’m exercising this without-cause termination, last day of work is this. Thank you. Move on. That’s it.
What Are Four Reasons that a Medical Employment Contract Can Be Terminated?
Let’s discuss the differences between why a contract would terminate and how a contract terminates. The “why” doesn’t matter. What matters is the language in the contract that tells the provider how the contract terminates? There are four common ways for a contract to be terminated. First, in a contract, it’s going to list the terms of the agreement. The term simply means how long does the agreement last. Now, some contracts have a language that automatically renews after the initial term, usually for one year. Let’s say it’s an initial two-year term. It’ll just continuously automatically renew for additional one-year terms unless terminated in one of the three ways. After this, we’ll talk about that next.
Termination Due to Lapsed Duration
Some contracts have no fixed term at all. It states that as soon as the contract is signed, it continues forever unless terminated. The first way to terminate the medical contract is for the initial term to end. There’s no renewal language, neither party wants to renew the contract, and that’s it.
Termination by Mutual Agreement
Next would be by mutual agreement. A medical contract may terminate by mutual agreement of both parties. Let’s say the provider starts, just not the right fit. The employer says you know what, this isn’t the right fit. We’re not going to require you to give us notice. We’re not going to require you to work anymore. Let’s wash our hands of the situation. And you both can leave. A mutual agreement is the second way you can terminate a medical contract.
For Cause Termination
The third way is for-cause or with-cause termination. This means if a provider or the employer is in breach of contract. There will usually be language that states one party has to give the other written notice. They need to state that they are in breach of contract together with the reasons why. And then, normally, there would be what’s called a cure period. A cure period means how much time a party must fix or cure the breach. Let’s say a provider had productivity bonuses in their contract that were supposed to be a monthly payment. The employer is not paying it either on time or at all. In that situation, the provider would then send a written notice to the employer stating you’re in breach of contract.
You’re supposed to pay me a monthly bonus, and you’re not. Suppose you don’t fix this within whatever the allotment is, let’s say 15 days. In that case, the provider can terminate the contract immediately for-cause. The third way of terminating the medical agreement is for-cause or with-cause termination. It doesn’t happen very often that a contract terminates with-cause. Normally, the parties would work out the differences in advance of that. But it does provide some leverage, I guess, to both sides if one of the parties isn’t holding up their end of the bargain.
From the employer’s side, let’s say the contract states that the provider must take one in four calls and then refuses to take calls. Well, then they’re in breach of contract. The employer will then basically state that you’re not taking calls. You’re in breach. It would help if you started taking calls, or we will terminate the agreement immediately. So, it goes both ways.
Without Cause Termination
The last and the most common way to terminate a medical contract is without-cause termination. Nearly any employment agreement is an At-will contract. And that means either party can terminate the agreement at any time. Still, it’s a certain amount of notice for a medical provider. Normally, 60 to 90 days is the industry standard for terminating an employment agreement without-cause in the healthcare industry. Now, why do you have to give this much notice? Let’s say you’re a provider, unhappy, want to leave, and have a better opportunity. The contract states that you have 60 days without-cause notice. You’d send them in writing saying I’m terminating the agreement without-cause termination section. Then you’d work out your 60 days, and then you’re free to move on.
This is important and why it needs to be in the contract if a provider starts with somebody and the practice makes it out to be much better. The volume is much better, your productivity incentives will be great, the hours will be reasonable, and it’s not. There’s no language in the contract where the provider can terminate it without-cause they could be stuck in that contract until the initial term ends.
Why Is the Transition Period Important?
So, you always want to have without-cause termination. And as I said before, normally 60 to 90 days. If you have 180 days, you want to negotiate that down to a reasonable amount. Now, the reason there are between 60 to 90 days in most contracts is for continuity of care purposes. Maybe if you’re in sales, you don’t need 90 days lead time to leave.
But suppose you’re a medical provider and have a patient base. In that case, there needs to be some time to transition them to a new provider, refer them to different providers, or provide bridge prescriptions. So, they don’t just go cold turkey until they find a new provider. That is usually why there are 60 to 90 days. To allow enough lead time to make a smooth transition and provide continuity of care for the patients. So, those are the four reasons you can terminate a contract. Either the term ends, mutual agreement, for-cause termination, or without-cause termination.
Other Blogs of Interest
- What Should be in a Veterinary Associate Termination Letter?: Termination Letter for a Veterinary Practice
- Contract Termination Letter: Can You Write an Email to Terminate a Contract?
- What Should be in a Nurse Practitioner Contract Termination Letter?
- Contract Termination: Can a Contract be Terminated by Agreement?
- What Needs to go in a Nurse Practitioner Termination Letter?: Nurse Practitioner Resignation Letter When It’s Time to Leave
What Should Go Into a Physician Assistant Termination Letter? | PA Resignation Letter Notice
What needs to be included in a termination letter that a physician assistant would give their employer? To know what exactly must go into that letter, you’re first going to want to look at your PA employment agreement itself. Suppose you want to leave for personal reasons. In that case, you’re moving out of the area, family, or something like that. That would be under your without-cause termination, which means you don’t have to give a reason. There can be no reason at all. You are just giving notice to your employer that you will terminate your agreement. Now, when you do this, your letter will be slim. You don’t have to give a reason. As I said, you need to give notice. You must state that you are giving your employer notice to terminate your contract.
Contract Notice to Avoid Patient Abandonment
And normally, there’s some notice period that can be anywhere from 60 to 90 days. It rarely goes over 90. Occasionally, I have seen 120 days in rural areas, but that’s a bit more on the rare side. You need to know how many days you must give notice before you terminate your employment and go your separate ways. This will register in your employment contract as without-cause termination. Now that we’ve got the letter, we know it needs to include that you are giving the notice to terminate. You’re letting them know that you are starting the time on your notice period and then when your last day would be. And that’s all that must go into a termination letter. If you want, you can say that you’re thankful for the opportunity. You can assure them that you will help with the transition and the continuity of care.
But those are the must, like what must be in that letter. It’s just you’re giving your termination notice whenever your last day is going to be, so that’s simple. However, you want to make sure that that letter gets to the appropriate personnel to start the time for that notice. If your notice is 60 to 90 days, it will state there. Let’s say, for example. It’s 60 days. The 60 days do not start until that letter gets to the appropriate personnel. And how do you know who to turn it into or mail it to? You’re going to look at your employment contract..
Standard Procedure for Delivering a Notice
There will be a notice clause, and normally there’s an address in there, but it will say exactly how you must give notice. Normally, it’s in writing. Sometimes, it can be through email, sometimes hand-delivered, and other times it must be certified and mailed to a specific address. So, always double-check that to make sure you’re doing that properly. That’s how you give notice in a termination letter for without-cause termination. I also want to talk about for-cause termination.
What this will look like on the physician assistant’s side. Your employer breaches their agreement. They do something egregious. I’m going to use the example of when they stop paying you. Still, they’re making you come in to give services. That would be a material breach of your contract. So, you could terminate it, which normally means you could get out of your contract sooner. You need to give a termination letter or notice that they are first in breach. That’s step one.
What Information Should Go In a Physician Assistant Resignation Notice Letter?
And normally, there’s a time to cure. It’s between 10 to 30 days. You’re going to let them know. You’re going to give them a termination letter, letting them know that they are in breach, they need to pay you for your services, and these are the terms that you guys have agreed to. And if they do not adhere to those terms within that cure period. Then at the end of that, anywhere from 10 to 90 days. Then you can send another letter. Let them know that they are in breach, they have not cured, and therefore you are terminating your employment contract immediately. And then you’re out. Again, though, you want to be careful. You want to make sure that you first give your notice that they are in breach. That’s important. And always look at your employment contract.
This situation is normally always outlined in an employment contract. So, there are two situations: for-cause or with-cause termination. And depending on which one of those depends on how you’ll give your notice. Ensure that you always give your notice properly, as outlined in the contract. And the termination letter itself doesn’t have to say much more than you’re terminating it, the notice, and when your last day is.
Contract Termination: What Does Termination Not For Cause Mean?
What is termination not for-cause? In an employment contract, it can get terminated in several ways, and the most common way for a contract to be terminated is not for-cause. It’s also known as without-cause for no good reason. I think without-cause is probably the most used name. I’m going to refer to no good causes without-cause to avoid confusion. As far as terminating an agreement, an agreement can terminate in many ways. Let’s say it’s a one-year contract if it’s just a fixed term. There’s no language that it automatically renews. The one year finished, and neither party decides to renew it, the contract terminates, and that’s it. A contract terminates with a mutual agreement. Either party, for whatever reason, decides, you know what, this isn’t working out, let’s go our separate ways.
Employment Contract Termination: With or Without Cause
A contract can be terminated for-cause. Suppose there is a breach of contract amongst the parties. In that case, there will be language in the contract stating if this happens, one of the other parties can terminate the contract immediately at their options. For instance, let’s say you’re a healthcare professional and have a license to do what you’re doing. Let’s say it’s a physician. This physician loses their medical license. They can’t perform the terms of the contract. The employer can automatically terminate the agreement.
Then the other way of terminating a contract is without-cause for no good reason. In this case, what does that mean? Well, almost every employment contract states that the contract can be terminated at any point, for any reason, with a certain amount of notice to the other party. And this is the important part. Normally, without-cause will usually be between 30 to 90 days in a contract. Let’s say the professional wants to leave. Maybe there are better job opportunities. Then they provide written notice that states, per the without-cause termination section, I’m giving you the 90 days’ notice. And then the professional works out those 90 days. At the end of the 90 days, they can move on to their new job opportunity.
Things to think about as far as without-cause termination: if the contract states you can only do it after a certain period. That’s a red flag! Some contracts will state you can only give without-cause termination after the first year or after the initial term of the agreement. You don’t want to sign a contract that has that. Why?
What if the Contract Does Not Have Without Cause Termination?
Well, if you enter a contract, many times, the employer kind of talks up the position, and it doesn’t turn out to be what you were expecting. And if you have no way of terminating the contract without-cause, you are stuck. So, you always want the ability to get out of the contract if it simply isn’t working. Maybe the volume isn’t there, you’re not making as much money as you like, the hours are different than they told you, or your call responsibilities are more than they told you to expect. There could be hundreds of reasons someone isn’t happy in a job. But it is a problem if you cannot get out of that job at any time. So, it would help if you had without-cause termination, 30 to 90 days is reasonable.
Anything over that is not reasonable. Sometimes, I’ll see a contract with 180 days or even a year without-cause notice. You don’t want that for a couple of reasons. First, once you provide notice that you’re leaving. Relationships can change, and they can sometimes be awkward. Sometimes, it cannot be very friendly. To shorten that period where it’s awkward is just better for the professional. So, you want a shorter without-cause termination. And then there also needs to be language in the contract that states if the professional gives notice. Still, the employer decides, you know what, you’re leaving. Just leave tomorrow. The professional should get paid for whatever the notice period was. If it was a 60-day without-cause notice period, the employer says, we don’t want you to be here long term. We don’t want you here at all.
Notice Period & Termination
The professional should get paid for those 60 days. I mean, think of it the opposite way. The employer requires a 60-day notice so they can make plans to transition, replace you, or whatever. They want the professional in that, so they’re not losing out on profit for 60 days. Well, the same thing should go for the professional. If they’re required to give notice, they should get paid for that amount even if the employer doesn’t want them to continue working. So, yes, you can terminate the contract without-cause.
It absolutely should be in every employment agreement. It is a huge red flag if there isn’t. I think, or at least I find, that if there is a contract without any ability to terminate the contract without-cause, there’s usually a reason behind it. And it’s usually because the employer is either badly managed or bad at business or maltreats their employees. It could also be that they have had a continuous string of people leaving early. And so, they want to prevent that, but you do not want to get into a situation like that.
What is Without Cause Termination in a Physician Contract?
Essentially it allows either party to terminate the agreement at any time. For any reason, with a certain amount of notice to the other party. This is important because if a physician enters a job, everyone expects a job to be great, right? You don’t take a job expecting you to want to leave immediately, but things change, or it certainly can be different once you start.
Let’s say a physician takes a job. After a few months, it’s clear it’s not a good cultural fit. Maybe they’re on productivity compensation, and the volume isn’t there. Maybe they don’t like working with the management or the other physicians. Whatever their decision, I do not want to stay here. And so, without-cause termination will allow that physician to give notice, work out a period and then move on.
Average Length of Without Cause Termination Notice
The average length, or at least the standard for most without-cause termination notice periods, is somewhere between 60 to 90 days. Anything higher than 90 days causes a couple of problems. Anytime somebody gives notice, the dynamics will change between the physician and the other physicians or the organization itself. You’re no longer in the long-term plans. Sometimes, there can be bad blood as well. And so a shorter period to have to work out whatever is advantageous. It’s just better. If you had a 180-day notice, you’re there for six months dealing with a potentially awkward environment.
Another thing to consider is the longer the lead time, the harder it is to find a new job. If you’re coming out of training, everyone comes out at the same time. So, all the employers understand this. There’s a rhythm to when they offer jobs and start onboarding and all that type of thing. If you’re out, you’ve been out for a while, and then you decide to switch, it can be at any time, but most people don’t post for jobs six months in advance. They will say, we have a need now. If you have a six-month notice requirement for your job, you may lose out on job opportunities because they need someone much faster than six months.
And so, they’re going to find somebody and leave you in the dust.
Two main reasons: don’t put yourself in a toxic environment for a long period, and then two, help shorten it down so that you can find a new job more easily. In the physician contract, it’s going to state how much notice you must give.
How Much Notice Time Do You Need to Terminate an Agreement?
And let’s say it’s 60 days in this example. It will also state that it must be in writing. So, you need to find in the physician contract that it’ll be under the termination section. And it will say without-cause termination or for no good reason or something like that. And then it’ll just state that either party can terminate the agreement with a certain amount of notice to the other, as I said before, in 60 days.
There’s another section in your physician contract called either notice or notice. And it will state exactly how you can provide notice to the employer. It’ll state whether it needs to be certified mail or hand delivery. Most physician contracts don’t have email; certainly, there’s no verbal acknowledgment, no fax. If you were to tell your boss I’m leaving in 90 days, do not give them a written letter stating you’re leaving. As a result, they could potentially force you to work for another 60 days until you give them effective notice. So, those two sections.
Look into the without-cause termination section to see how long or how much notice you must give. And then, look in the notices section and ensure that you can provide effective notice. I’ve had a couple of times where physicians have called me after the fact and said I emailed my boss. It was 60 days’ notice; they waited 45 days and then came back and told me I didn’t give them effective notice. And now, they’re saying I must give them another 60 days. Well, it’s vindictive on the part of the employer. They were mad and did that on purpose just to kind of screw with the physician.
What Happens if a Physician Do Not Give Effective Notice
But if you don’t give effective notice, it doesn’t count. Ensure you’re following both of those things: giving the proper notice and following the notice section. Now, what happens if you decide to leave a job and don’t give the proper amount of notice? Well, many physician contracts will have penalties associated with that. For instance, a common way of doing it would be to penalize the physician. Whatever their average daily rate is for every day, they didn’t give enough notice. If it was 60 days and they only gave 30 days, they’d owe 30 days of their average pay to the employer. This could be a significant amount of money.
You want to ensure that you’re giving as much notice as required in that without cause section. Therefore, you can’t be penalized. They could come after you for recruitment costs, locums to cover your shifts, or if you’re an outpatient or something like that. It’d be rare for them to do that. However, you are opening yourself up to liability if you fail to give them the specified amount of notice in your physician contract.
What is the Best Without Cause Termination Length in a Physician Contract?
Nearly every physician employment contract contains a provision that allows either party to terminate the agreement for any reason with a certain amount of notice to the other party. The typical amount of without-cause termination notice is 60 or 90 days.
Terminating employees is an important business decision. There are two types of terminations: with-cause and without-cause. To fire someone for violating company policies or committing unethical acts can be justified as termination with-cause. On the contrary, firing them for poor performance alone may not be enough to discharge the employee. This type of dismissal should instead fall under “termination without-cause.” You must understand which kind you’re terminating. That is before making a final decision on whether it would adversely affect other departments within your organization.
Termination Without Cause
Terminating an employee without-cause is a common practice among private employers. This dismissal can occur for several reasons, such as budget problems, operational restructuring, and downsizing. The phrase “termination with-cause” might be more accurate. The employer has grounds to fire someone who isn’t performing up to expectations or meeting certain criteria laid out in their contract. However, they do have this right under work at-will laws present in some form across all 50 states. Unless moving forward would violate state or federal employment law.
How Does a Physician Provide Notice?
There will be a Notice Section in every physician employment contract. This Section will detail how notice can be given: personal delivery, via certified mail, email, fax, etc. The physician must provide written notice of intent to terminate the agreement. Verbal notice is not sufficient.
Considerations with Longer Notice
- Greater than 90 days notice
- More time to prepare for a new job (travel, credentialing, etc.)
- Awkward work environment
- Hostility from employe
- Considerations with Shorter Notice
Less than 90 days’ notice
- Less interaction with the employer
- The new employer does not have to wait a long period for the physician to start.
- Not enough time to prepare for a new job (tail insurance, credentialing, housing, etc.)
- Term Length
- The term of the employment agreement refers to how long the contract lasts. Most physician employment agreements are between 1 to 3 years, with automatic renewal after the initial term ends.
Contract duration clauses are often found in employment contracts to outline how long the contract will last. This is typically for an indefinite amount of time. But if there is a specific date on when it would end, that could also be included. An example of this might include someone being hired with no specified term length. They are then coming back after completing their degree or reaching another goal set by both parties.
For this reason, that work can resume more easily without starting from scratch. Every time something happens outside their control. You were specifically graduating college in four years instead of six. That is because you could go part-time while working during your first two years. That is before going full-time once classes stopped for summer break.
Termination Without Cause
You would be wise to use a duration clause when defining an agreement’s effective period. This can help you protect your interests should the contract need early termination. And also helps provide clarity in regards to what type of early termination is possible for both parties involved. It includes things like whether or not it will end on its own accord at some point. If any specific events trigger an automatic expiration date (such as a breach), and more!
When creating a contract, both parties should know what the terms are. If there is a duration clause in place, it’s common for either party to be able to renew with one another if they desire. And as long as you spell out your conditions within the duration clause. This can also prevent confusion about when their time will expire. How much notice is given before termination of service takes effect?
Not every contract has an explicit end date. Otherwise, those that do usually allow flexibility on behalf of both parties. They may have desires to continue after expiration or wish not to terminate before its conclusion. You could always include these personal clauses into the main document, explaining them clearly, so everyone knows where they stand at all times- including yourself!
For Cause Termination
Companies usually have an employee handbook to outline the standards of behavior expected from their employees. A separate code of conduct may also be in place. Outlining specific incidents for termination should they happen within a company or on its premises. Common causes that lead to immediate dismissal include violence and drug abuse. On the other hand, theft is not uncommon either, as well as sexual harassment, depending upon the severity and number of offenses committed by one individual. The more severe cases typically result in automatic termination with lesser violations. Consequently, it might require progressive warnings before finally being terminated if it reaches a point where other options are no longer viable.
When the Length Does Matter
The one instance where the initial term of the agreement matters is if the physician must repay a sign-on or relocation bonus if they leave within the initial term of the agreement. The agreement will dictate how much of the sign-on bonus is forgiven based on the physician’s employment length. For instance:
- If the initial term is 24 months, 1/24 of the sign-on bonus forgives each month.
- Or if the initial term is 36 months, each year completed will forgive 1/3 of the sign-on bonus.
- If the physician does not complete the initial term, they must repay all the sign-on bonuses.
Set Term With the Employer
Not all employees enjoy the same protections when it comes to employment. This is why it’s so important for individuals negotiating a contract to be fully aware of their options before committing themselves and signing on that dotted line. For example, an at-will employee can get let go without notice if they don’t do what their employers want them to do. Think back to your favorite show where someone gets fired because she didn’t sell enough lemonade in one day! Meanwhile, some contracts specify fixed terms like two years or more. These agreements will detail specific reasons and probation periods (if applicable) for termination without-cause should either party fail to uphold certain obligations set forth by this agreement.
When an employee must quit their job, they are obligated to give notice that the relationship is ending. It’s typical for a physician to give between 60 to 90 days notice before terminating employment so both parties can prepare accordingly.
An employment contract is a formal agreement between an employee and employer in which the two agree to work together. Fixed-term contracts are one type. But there are also other jobs with more fluid timelines, such as hourly wages or commissions based on performance.
Termination | Terminated Without Cause
Employees get terminated early in a fixed service contract if the employer provides valid reasoning and proof. However, employers must provide evidence that an employee was not fulfilling their obligations before termination can occur. For instance: If an employee wasn’t providing services agreed upon in a contract. But he had been given sufficient time for absences due to illness or injury. Hence, they could cancel it without giving notice. However, if either party provides no reason, this would fall under “constructive dismissal.”
An employee who signed a fixed term of employment has certain rights when considering being dismissed from work earlier than expected. That is from an agreement with the company during the negotiation stages-one. Such right relates to whether duties were met per the original terms set.
Employment Contract Questions?
Contract Review, Termination Issues and more!