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Why Detailing Physician Employment Location is Vital in Employment Agreements

-Jon Appino, Principle and Founder of Contract Diagnostics – 8/4/2020

More and more, we here at Contract Diagnostics are seeing the importance of including specific details about the location of employment in physician employment agreements. In the age of consolidations, expansions, and acquisitions, the physical location of a doctor’s workplace can change unexpectedly. The location must be a part of the contract.

This is one area where boilerplate language is typically insufficient. A lot of employers that have one location might not have a specified location in the contract. Some employers may want to expand in the future, some may have a general hub and numerous outreach clinics, yet others may be a large conglomerate of many many locations and clinics and hospitals. We do recommend having a clear, specific defined location in the agreement. Changes to this expectation should be upon your approval or mutual consent. It’s something that we feel is of utmost importance. We have taken phone calls from physicians who have been in jobs where they did not have it specified, and they were asked or maybe told to go to a different location, and perhaps that hospital is not set up the way they want it to be, or maybe it’s inconvenient for their personal life. There are a variety of different things that can come up. We think it’s very important to specify and have very good expectations around the location.

This issue of clarity regarding location can also bleed into the noncompete and how extensive and large that non-compete is. There may be a non-compete that says the noncompete is a certain number of miles’ radius from each office. If they have five offices, that may greatly vary the restrictions post-termination. Something as specific as having a defined location can be very impactful to a physician’s employment contract.

We like to know the location of a physician’s practice. If it’s multiple, if it’s just one, if it can change unilaterally by the direction of the employer, or if it must be agreed to by the physician. These are items that, if ironed out with specific details in the employment agreement, will make for a smoother relationship between the physician and the employer.

“’Where will my primary clinic be?’ ‘Are additional going to be required?’ ‘Are there expansion plans in the future?’ ‘How are staffing decisions made if/when?’” Be confident in this candid discussion item when you are doing due diligence. Having this talk with the potential employer now can clarify their future plans, your expectations, and provide a nice way to request more specifics in the formal agreement. Contact us here at Contract Diagnostics, a partner and recommended company of the White Coat Investor.