What to Do if Your Employer Breaches Your Physician Contract

Discovering that an employer has failed to honor a physician’s employment contract can be both frustrating and concerning. Breaches of contracts can take many forms, from withheld pay and altered duties to violations of benefits or malpractice coverage. Knowing how to respond effectively, protect your rights, and pursue potential remedies is crucial for safeguarding both your professional reputation and financial security. This is what to know about breaches of physician employment contracts. 

What Is a Breach?

A breach is the failure to fulfill a legal duty, obligation, or promise outlined in a contract or agreement. In legal terms, a breach occurs when one party fails to perform as required under the contract, resulting in harm or loss to the other party.

It is important to understand that not every dispute or change in employment conditions rises to the level of a breach of contract. Minor disagreements, routine adjustments to job responsibilities, or temporary scheduling changes that do not conflict with the terms of the agreement are generally not considered breaches. Courts typically focus on whether the employer’s actions constitute a material violation of the contract, meaning the actions significantly deviate from the agreed-upon terms and negatively affect the physician’s rights or obligations. Additionally, for a breach to be legally actionable, it must cause measurable harm, such as financial loss, damage to professional reputation, or interference with the physician’s ability to fulfill contractual duties.

Examples of Breaches 

In physician employment, a breach can happen in several ways. Here are some examples:

Failure to pay agreed-upon salary or bonuses: Employers may withhold regular pay, incentive payments, or performance-based bonuses outlined in the contract.

Violation of non-compete or exclusivity clauses: Employers may impose restrictions beyond what was agreed upon or enforce terms inconsistently, potentially limiting future employment opportunities.

Reduction or denial of benefits: This can include cutting health insurance, retirement contributions, paid time off, or other contractual benefits promised to the physician.

Failure to provide promised administrative support, staffing, or resources: Lack of support, such as inadequate office staff, supplies, or technology, can hinder a physician’s ability to perform duties effectively.

Unilateral changes to work schedules, call requirements, or job duties: Employers may alter shifts, on-call responsibilities, or clinical duties without consent.

Improper termination or failure to follow contractual procedures: Ending employment without observing notice periods, severance provisions, or other contractual requirements can constitute a breach and leave the physician without recourse.

Steps to Take If a Physician Suspects a Breach

If a physician suspects that their employment contract has been breached, taking prompt and deliberate action is essential. Here is what a physician should do: 

1. Review the Employment Contract Carefully

A physician should thoroughly review the employment contract. Identify the specific provisions that may have been violated, including:

• Compensation and bonus clauses
• Termination or severance provisions
• Non-compete or restrictive covenants
• Benefits, malpractice insurance, or expense reimbursements
• Job responsibilities, schedules, and duties

Understanding the exact language of the contract will help determine whether a breach has occurred and guide the next steps.

2. Document Everything

Thorough documentation is critical. Keep records of:

• Emails, letters, or memos reflecting the breach
• Payroll records and benefits statements
• Notes from conversations with supervisors or HR
• Any relevant meeting notes or correspondence

A well-documented record can support a claim and demonstrate that the physician made reasonable efforts to resolve the issue.

3. Attempt Internal Resolution

Before taking legal action, it is often beneficial to address the issue internally. This can involve:

• Requesting a meeting with HR or administration
• Presenting evidence of the breach and requesting corrective action
• Seeking clarification on any misunderstandings or miscommunications

It is important to note that speaking with a physician employment attorney before having these internal discussions may be beneficial. 

4. Consult an Experienced Attorney

If internal resolution is unsuccessful or impractical, it is essential to consult an attorney who specializes in physician employment law. An attorney can:

• Evaluate whether the employer’s actions constitute a breach
• Advise on potential remedies and legal strategies
• Communicate with the employer on your behalf
• Represent you in negotiations, mediation, or litigation 

What Can Physicians Do About A Breach?

Physicians have several legal remedies available if an employer breaches a contract. One option is negotiation or settlement, which often allows disputes to be resolved without going to court. Through negotiation, physicians may recover back wages or withheld bonuses, have benefits or coverage restored, or seek clarification or adjustment of job duties. Another option is mediation or arbitration, which is often required by physician contracts through dispute-resolution clauses. 

If negotiation or alternative dispute resolution is unsuccessful, physicians can pursue litigation for breach of contract. Courts may award compensatory damages to recover financial losses caused by the breach, order specific performance requiring the employer to fulfill contractual obligations, and, in some cases, allow recovery of attorney’s fees and costs. 

Preventing Breaches

The best way to avoid a breach is to prevent it from happening. While not all breaches can be avoided, physicians can take proactive steps to reduce the likelihood of disputes. 

• Hire a physician employment contract attorney. They can review contracts before employment begins or aid in the negotiation of terms after the fact.
• Carefully review contracts before signing. Pay close attention to compensation, benefits, duties, non-compete clauses, and termination provisions.
• Negotiate favorable terms in the contract. Ensure the contract reflects realistic expectations, protections, and dispute resolution procedures.
• Maintain thorough documentation. Keep records of communications, payroll, and benefits.
• Communicate with employers proactively. Address concerns or changes in duties early with HR or management.

Contact An Experienced Physician Employment Attorney 

A breach of a physician’s employment contract can have significant consequences. Consulting an experienced physician employment attorney about what to do — whether litigation is necessary — is crucial to addressing the breach. Having the right advocate can help physicians move forward after the breach, once they are made whole.