Without a dental employment contract, your employment is generally on at “at will” basis. This means that either the employer or the employee may terminate the employment at any time, with or without notice, so long as the termination is not otherwise unlawful under state or federal antidiscrimination or other state or federal law. (State laws vary: some states require notice.)
This uncertainty is one reason that signing a dental employment agreement can provide some protection for your future. An employment agreement usually provides for a fixed term of employment and stipulates that during the fixed term, the employer may only terminate the employment for certain reasons (generally referred to as “for cause” or “for good cause”).
Term and termination provisions are important because they set out the answers to three important questions regarding contracts
- How long does the contract last?
- When and how can the parties terminate the contract?
- What happens if a party invokes a termination right?
As you review your employment contract, be sure to look at these sections:
Term. The “term” of an employment contract is the stated period during which the employment contract is intended to last. Some employment contracts are for indefinite terms (no end date is stated) and continue until terminated by one of the parties or by the occurrence of some event. However, in many cases, the duration is stated in the contract. The clause may also include an automatic renewal.
An employer may want a set term for an employment agreement so that the employer can rely (barring termination for cause) on the employee-dentist having a contractual obligation to remain with the practice for a set period of time (given the training effort and expense that the employer will be investing in the employee). The employer often prefers that the employee has a contractual obligation to provide sufficient notice before leaving.
The inclusion of a defined term is also beneficial to the dentist-employee. This is particularly true if the employee-dentist is taking significant action in reliance on the offer (such as relocating a family, entering into a long-term residential lease, or leaving an existing position). The employee-dentist might be concerned about the lack of job security if there is no set term of employment, so that the employment could be terminated by the employer “at will” (i.e. without cause).
Termination. “Termination” addresses the rights that a party may have to end the agreement, other than by the agreement’s natural expiration. Two different termination scenarios are often addressed: termination without cause (simply within the discretion of one or both of the parties) and termination for cause.
The employer will want to establish its right to terminate the agreement if the employee-dentist acts in a manner detrimental to the practice, such as loss/ suspension of license, failure to follow the practice’s procedures, misuse of the practice’s information, etc.
Termination without Cause. This allows a party to end an agreement for any reason (or for no reason at all). Advance notice is sometimes though not always required, and the agreement is terminated at the end of the specified notice period. Depending on what the agreement provides, the employer invoking the termination may be required to pay the terminated employee as if the contract had continued to the end of the term.
If the agreement expressly provides for termination without cause, or fails to state a definite employment term, the employee may be concerned if there is not a notice period that would give the employee income from the date of notice until the effective termination date.
Termination for Cause. Many employment contracts define the conditions under which it is possible to terminate the agreement prior to the end of the term, as where the termination is justified by the conduct of the employee. Typically, these “for cause” provisions permit termination when the employee engages in egregious conduct or simply fails to perform the employee’s required duties under the contract. For example, an agreement may provide that the employee-dentist may be terminated if he or she is found guilty of a felony or loses his or her license to practice dentistry. Some contracts may provide a certain time period during which the employee has an opportunity to “cure” correctable infractions, such as not meeting the practice’s standards or reinstating a lapsed dental license.
The employee may be concerned if the specified “causes” are too general (such as “failure to follow practice procedures”). In some circumstances, termination “for cause” may be immediate (e.g., loss of license to practice, un-insurability) or it may provide for an opportunity to cure the reason for the termination (for example, to get the license reinstated). If the agreement provides the employer a broader right to terminate, the employee might try to negotiate a requirement of a written warning and time to cure prior to the employer being able to invoke such a broad termination right.
Things to consider about term and termination clauses
Expiration of the term
Consider what happens where an agreement is for a set (definite) term. What happens if the term expires and the parties do nothing other than continue the employment? This likely happens with some degree of regularity. It may be best to consider — and address — this scenario in the initial agreement. Thus, consider what the parties wish to happen at the expiration of the term.
Should the agreement automatically renew (an automatic renewal provision is sometimes referred to as an “evergreen” provision)? If so, for how long a renewal period — for the same period as previously, or for some briefer period (such as month to month)? Consider the implications in each case. Also, where the parties want the contract to automatically renew, consider whether a party should have to provide advance notice (and how much notice) of intent not to renew prior to the termination date to avoid the automatic renewal.
If the agreement provides that the employer may terminate the employee dentist’s employment without cause after some specified amount of time, the employee should consider requesting that this right of termination without cause run both ways
Post-employment access to patient records
A dentist’s post-employment access to patient records may depend on state and federal law as well as the employment agreement. It’s prudent to start with state law, which may expressly provide whether the doctor can access the records, and for what purposes, then determine whether any federal law applies.
For example, HIPAA may require patient authorization before a covered practice discloses patient information in response to a given request for access, depending on the purpose of the request. If the law does not provide, the contract may.
The employee might request that the employment contract permit post-employment access (to the extent legally permissible) to patient records for the purpose of peer review and malpractice defense, and that the employer make good faith efforts to secure any required patient consent for such access.
See more details and sample term and termination clauses in chapter 4 of Dental Employment Agreements: The Devil’s In the Details.
Learn more about negotiating and understanding dental employment agreements and contracts. Check out the full list of clauses and topics and download the ebook, which is full of sample language, examples and in-depth explanations.