If previously addressed in the employment agreement, the parties should reaffirm their respective rights and obligations regarding medical records, confidential information, noncompetition and nonsolicitation provisions. Otherwise, the termination agreement should identify the physician’s competitive and solicitation activities post-termination.
A noncompetition provision should include the geographic territory in which and the time period during which the departing physician cannot compete with the former employer. It is important to remember courts will render these provisions as unenforceable and invalid if improperly drafted or overly broad. It is common to see nondisparagement provisions, whereby each party agrees to refrain from making any negative or false statements regarding the other. Nondisclosure provisions are common as well with regards to what may be disclosed to third parties.
The separation agreement also should address the return of company property, including office key, credit card, computer, cell phone, and beeper. Patient records and charts should be completed and returned to the employer. Often, the departing physician will still be allowed reasonable access to patient records post-termination for certain authorized purposes (e.g. defending disciplinary actions, malpractice claims, and billing/payer claims and audits), usually at the physician’s own expense.
The termination agreement may also outline how patients will be notified about the physician’s departure. If a patient wishes to continue treatment with the departing physician, the former employer must be ready to transition the patient.
A well-written termination agreement will provide for mutual releases. However, there are often exclusions from the mutual releases, such as pre-termination date liabilities; medical malpractice claims resulting from the physician’s misconduct; or taxes, interests, and penalties covering the pre-termination date.
Step 3: Severance Pay
Depending on the circumstances surrounding the termination and employment agreements, a physician may be entitled to severance payments beginning on the date of termination and/or for a period of time post-termination. The departing physician should determine whether severance is appropriate and whether he or she is willing to forego severance payments in exchange for other benefits. Depending on the dollar amount and the physician’s career objectives, it may be worthwhile to sacrifice severance payments for a less onerous noncompete provision, for example.
Step 4: Take the High Road
Because you never know when your paths might cross with former coworkers or employers, it is always sensible to remain discreet and level-headed during this trying period. Although it is natural to discuss an impending move with others, a prudent physician will avoid water-cooler gossip.
In the event conflicts arise, limit the public disclosure of these disputes. Neither side wins the public relations battle, and often, both sides lose. This is a circumstance where experienced legal counsel can be invaluable as you navigate these potentially rocky waters. You would be well served to seek legal advice to discuss your intentions before making an actual move.
As always, remember conversations you have with counsel are typically protected by attorney-client privilege. It is always advisable to secure legal counsel to review the terms of an employment agreement, negotiate a fair termination/separation agreement, and serve as an advocate during this challenging career move.
Steven M. Harris, Esq., is a nationally recognized healthcare attorney and a member of the law firm McDonald Hopkins LLC in Chicago. Write to him at [email protected].