When hiring an associate dentist, it is critical for a dental practice to have a strong and clear employment agreement. 

While practices often understand the importance of engaging a lawyer to prepare the agreement, they are usually in a rush.  They also may not know how to find an experienced healthcare lawyer to draft the agreement. 

As a result, the practice may engage an attorney whom the owner knows, even if the attorney doesn’t have experience in negotiating dentist employment agreements. Or, the practice may try to use an old template or a document from the Internet in the hopes of saving time and money.

However, if not drafted right, associate employment agreements can be a headache for dental practices and can lead to the loss of clients and increased expenses.  Further, the associate could engage counsel to review and propose changes to the agreement, leaving the practice in the position of having to engage a lawyer after the fact to represent the practice.

Healthcare lawyers who regularly negotiate dentist employment agreements can be a valuable resource for practices.  They can prepare the employment agreement efficiently and effectively, using a well-written template containing clear provisions that are favorable to the employer.  They can also allow the practice to rest easy, knowing that it’s prepared in the event that the associate attempts to negotiate the agreement.

Regardless of which way the practice elects to go with counsel, there are certain provisions that a practice should keep in mind when negotiating an agreement with an associate dentist.  Here are a few general tips and pitfalls to avoid:

  • Compensation.  If any part of the associate’s compensation is based on collections, it should be made abundantly clear in the agreement how the compensation will be calculated and when it will be paid (including how the associate’s final reconciliation will be performed).  The last thing you want is arguments and potential litigation over what the practice owes the associate in compensation, whether during or after employment.
  • Tail Insurance.  If the practice has claims-made professional liability insurance, the cost of the associate’s tail insurance after termination of employment must be addressed.  Generally, the practice will want the associate to be responsible, but in any event should have the right to purchase the insurance and offset the cost against the associate’s final compensation.
  • Corrective Work.  The associate should be responsible for covering the cost of all corrective work, both before and after termination.  The practice should have the option of requiring the associate to come back to perform the work at a reasonable cost to the associate, or to perform the work and charge the associate for it.
  • Restrictive Covenants.  Non-compete and non-solicitation covenants (including those prohibiting solicitation of employees and patients) must be well-written to protect the practice.  Among other things, the agreement should allow the practice to enforce the covenants without posting a bond with the court and prohibit the associate from asserting a defense to the enforcement of the covenants.
  • Schedule.  It can benefit the practice to have the associate’s schedule detailed in the agreement.  However, the practice should also retain the authority to modify the associate’s schedule as it deems necessary, and require advance approval for PTO time.

This list is non-exhaustive, as there are many important parts of a dentist’s employment agreement. Also, this post does not constitute legal advice.  If your practice needs to draft an employment agreement for an associate or is interested in updating an old template agreement for future use, we would be happy to assist you. Please contact me at ecyran@foxrothschild.com or (610) 458-4963.