When to Walk Away From a Physician Employment Contract

Physician employment contracts are among the most significant agreements a medical professional will sign throughout their career. However, not all contracts are good for physicians. Sometimes, the physician will be unaware that the terms are unfavorable. Understanding when to walk away from an unfavorable agreement is essential to protecting both your career and your financial future. Here are some key warning signs and negotiation strategies to help physicians make informed decisions before committing to an employment contract.

How Do I Know If My Employment Contract Is Bad?

The best way to avoid accepting a bad employment contract is to recognize the warning signs before signing. A contract may be unfavorable if it includes unclear or unreasonable terms. While not every concerning clause is necessarily a dealbreaker, identifying potential issues early allows physicians to negotiate from a position of strength and protect their long-term interests.

Common Red Flags

These are some common red flags to look out for in physician employment contracts. While these are not all dealbreakers, or even a big deal for some, it is important to know what to look for. 

Noncompete Provisions

Non-compete provisions are common in physician employment contracts, but overly broad restrictions can significantly limit future career opportunities. A contract may attempt to bar a physician from practicing within an unreasonably wide geographic area or for an excessive period of time after leaving the employer. In some cases, non-compete clauses may even attempt to restrict a physician from practicing in an entire specialty. These restrictions can hinder professional growth, reduce earning potential, and create unnecessary stress. It is crucial for physicians to carefully review and, if necessary, negotiate these clauses to ensure they are reasonable, enforceable, and do not unduly limit future opportunities.

Unclear Compensation

Compensation is often the first detail physicians notice in an employment contract, but it is also one of the most complex and important aspects. A red flag appears when a contract describes compensation in vague or ambiguous terms, leaving key details open to interpretation. Equally concerning are agreements that tie pay to metrics that are difficult to measure or achieve, such as unrealistic productivity benchmarks or collection quotas. Physicians should take the time to fully understand how productivity-based compensation models operate, including how work is tracked, how revenue is calculated, and what portion of collections actually counts toward their pay. Contracts that rely heavily on discretionary bonuses without clear written criteria can create unpredictable and inconsistent income, making financial planning difficult. 

Repayment Obligations

Some contracts require physicians to repay signing bonuses, relocation expenses, or training costs if they leave before completing a specified term. While repayment provisions are not inherently problematic, red flags appear when repayment obligations are disproportionate, extend beyond reasonable timeframes, or lack clarity about repayment amounts. A physician should understand exactly what financial risks they assume if they decide to leave before the contract ends.

Vagueness Surrounding Call Duties

A significant red flag in physician employment contracts arises when call duties are not clearly defined. Contracts that fail to specify how call coverage will be distributed, the frequency of on-call responsibilities, or the compensation provided for extra or overnight calls can leave physicians vulnerable to excessive workloads. Without well-defined parameters, a physician may unexpectedly bear a disproportionate share of call coverage. Physicians should seek contracts that detail the schedule, frequency, responsibilities, and financial arrangements for call duties.

Unfavorable/Unclear Termination Clauses 

Some termination clauses do not specify the conditions under which a physician must fail to meet to face termination. A problematic termination provision may allow the employer to terminate the physician “without cause” with very little notice, sometimes as short as 30 days. Conversely, a contract that limits the physician’s ability to leave without substantial penalties, such as repayment of large signing bonuses or relocation expenses, can trap physicians in an unsustainable position. Termination clauses should ideally be balanced in favor of both the employer and the physician. 

The Contract Is Bad—Now What?

Many physicians, like employees in other professions, believe that once an employment contract is presented, they must accept it as-is or risk losing the opportunity. In reality, physicians typically have far more leverage than most employees, and in the medical field, it is widely understood that contract negotiation is both expected and reasonable. It is helpful to consider the initial employment contract as a “first draft” rather than a final document.

While employers do retain the right to set the terms of employment, and some clauses may be non-negotiable, there is often room to request modifications or to seek alternative arrangements. Employers may also offer additional incentives to offset certain contractual restrictions. Nevertheless, it remains the physician’s responsibility to carefully evaluate the agreement and determine whether it is acceptable in its current form.

This is where a physician employment contract attorney becomes invaluable. An experienced attorney can review the contract in detail, identify potential red flags, and advise on which clauses are negotiable. They can also help craft counterproposals and negotiate terms that protect the physician’s financial and professional interests.

What If I Already Signed On the Dotted Line?

Signing a physician employment contract does not necessarily mean that every term is permanent. Just as these agreements can be negotiated before signing, they can often be revisited and renegotiated after the fact, particularly if circumstances change or if the initial terms prove unworkable in practice. Employers may be willing to adjust compensation provisions to retain valuable talent. Physicians should not assume they are locked in without options. An experienced physician contract attorney can help identify opportunities for renegotiation and advocate on the physician’s behalf.

Contact An Experienced Physician Employment Contract Attorney 

The nuances present in a physician’s employment contract can be overwhelming, and the consequences of signing an unfavorable agreement may follow a physician for years to come. An experienced physician employment contract attorney can help physicians understand the terms, identify hidden risks, and negotiate provisions that better protect their interests. Whether reviewing a new offer, reconsidering a signed agreement, or facing a potential dispute, legal guidance on physician employment matters can provide clarity and peace of mind.