What is an Employee Arbitration Agreement?

When an employee starts a new job, his employer may ask him to sign multiple documents.  These documents can include an employee contract, a receipt of an employee handbook or even an acknowledgement of corporate policies.  Sometimes, an employer will include an employee arbitration agreement within those documents.  The employee arbitration agreement can be a stand-alone document or it can be buried within a document, such as the employee handbook.  Regardless of how the agreement is presented, if an employee signs that document, he is most likely agreeing to arbitrate most legal disputes.   

What is an employee arbitration agreement? 

Typically, an employee arbitration agreement is an agreement between the employer and the employee to bring any legal claims that may arise between the two parties to arbitration, rather than to court.  An employee arbitration is a legal proceeding; it is conducted by an arbitrator, a private citizen (i.e. not elected or appointed) who is often times a lawyer herself. 

A claim in arbitration proceeds much in the same way as if the claim were in the court system.  The parties can conduct discovery, take depositions and file motions.  The arbitrator decides any disputes between the parties, just as a judge would.  Should the case proceed to trial, that trial takes place in front of the arbitrator, in a neutral location.  The arbitrator’s decision after the trial is final and binding. 

Is employmee arbitration preferable to filing a court case? 

Currently, courts are strongly in favor of parties arbitrating their claims rather than pursuing them through the judicial system.  This is because arbitrations conserve judicial resources, are conducted more quickly and can be less costly to both parties.  The Federal Arbitration Act (9 U.S.C. Sec. 1, et seq.) requires that courts send parties to arbitration if a valid arbitration agreement exists; in other words, a judge cannot choose to keep the case in his courtroom.

Employers also tend to favor arbitrations as the arbitrations are usually a quicker, less costly way to resolve disputes.  The employers may also like to avoid emotional juries/peer-driven juries/the uncertainty of jury awards.  (first two maybe a bit controversially stated?) 

Employees, however, may resent being forced to skip their proverbial ‘day in court.’  They are deprived of their chance to tell their story to a jury, a jury which may be more generous with an employer’s coffers than a professional arbitrator might be.  (Again, controversial?).  More often than not, it is juries (comprised of an employee’s (perhaps more sympathetic) peers) that award large monetary verdicts.  (controversial?)

Are employee arbitration agreements enforceable? 

Because they may want their day in court, many employees try to avoid arbitration.  If they have signed an employee arbitration agreement, can their employer force them to arbitrate?  While the current caselaw does favor compelling employees to arbitrate, a court may strike an agreement if it does not comply with certain legal standards.  For instance, the arbitration agreement must cover the claims at issue (e.g. state that an employee agrees to arbitrate any wrongful termination claim).  Additionally, an agreement must be both procedurally and substantively conscionable (essentially, the bargaining position of both parties must be somewhat equal and the actual terms of the agreement must be reasonable).  If an arbitration agreement does not cover the employee’s claims, and/or if the agreement is substantially unfair, a judge could disregard the arbitration agreement and instead allow the employee to litigate his claims through the court. 

Do you have questions about employee arbitration agreements?  Contact us:  we can help.  Call or email any time. 

Standard Clauses in Physician Agreements - Patient Receipts

Patient Receipt Clauses – What do these look like?

Sample:

(a) You agree that any checks or funds made payable or received by you for professional services rendered on behalf of the Practice during the Term of your employment hereunder shall be the exclusive property of the Practice and shall be promptly paid over or endorsed to the Practice for deposit in its account.

(b) You further agree that the Practice, or its designee, shall have the exclusive right to bill patients for the professional services rendered by you on behalf of the Practice hereunder and to collect all such fees for its own account. You agree to execute such other documents which may be necessary to effectuate the foregoing.

(c) You hereby authorize the Practice to endorse and deposit to its account any checks made payable to you on account of professional services rendered on behalf of the Practice during the Term of this Agreement and grant the Practice a limited power of attorney to effectuate the foregoing.

Patient Receipt Clauses – What do they mean?

These are fairly self-explanatory:  the practice is in charge of the billing and collecting.  Your job is to provide the best medical service you possibly can.  The practice is in charge of all decisions related to billing and collecting.

What this means for you, practically speaking is that you cannot make side-deals with patients.  You treat the patient, and the practice deals with billing.  If the practice wants to give someone a discount, that is their decision, if they want to be totally ruthless about billing and collections, that is their decision too. 

When it comes to money, you get your compensation and the practice deals with the rest.

Patient Receipt Clauses – What should I do?

There is really not much to do.  If you want more ownership of billing, you need to take greater ownership of your practice (which, is becoming increasingly rare in this age of massive, hospital-owned practices).  Of course, if you disagree with your employer’s practices you can always tell them as much and, if appropriate, change jobs (easier said than done, I know).

Want Help with your Physician Employment Agreement?  Contact us – we can help.  Our attorneys have worked with hundreds of physicians from all across the country. Call or e-mail any time.

Standard Clauses in Physician Employment Agreements - Employment at Will

Physician Employment Agreements: Employment at Will Clauses – what do these look like?

Sample:  “Your employment with the Practice is for no specific period of time. Your employment with the Practice will be “at will,” meaning that either you or the Practice may terminate your employment at any time and for any reason, with or without cause. Any representations which are contrary to or conflict with the foregoing that may have been made to you are superseded by this letter agreement. Notwithstanding anything to the contrary, in keeping with the “at will” nature of your employment relationship with the Practice, the Practice reserves the right to review, on an annual basis or more frequently as determined by the Practice, and make changes to your job description/duties and title and your compensation and benefits. Although your job description/duties, title, compensation and benefits, as well as the Practice’s personnel policies and procedures, may change from time to time, the “at will” nature of your employment may only be changed in an express written agreement signed by you and a duly authorized officer of the Practice.”

Physician Employment Agreements: Employment at Will Clauses – what do they mean?

Basically, these “Employment at Will” clauses mean that you can quit any time you want and, conversely, the practice can fire you any time they want.  Either side can do this for good reason, bad reason, or no reason at all.  The only real limitations on the practice’s authority to terminate you, are based on protected categories like, race, age, gender, etc., as well as retaliation.  But this does not mean that the practice has to have a fair, or even defendable, reason to terminate.

Physician Employment Agreements: Employment at Will Clauses – what should I do?

Think about your job prospects.  The alternative to employment at will is a contract setting forth a term.  But this is a double-edged sword.  While you have more job security with a term contract, you are also locked in with a practice, perhaps for longer than you want to be.  The key is to think of your employment agreement like a pre-nuptial agreement, prepare for the worst, and you can cover yourself.  But to do so will require you to think hard about your career and future.

You do not have to be a genius to figure this stuff out on your own, but if you want to make sure, or just don’t have the time to put into it, you can also call an attorney who can walk you through every step of the process.

Want Help with your Physician Employment Agreement?  Contact us – we can help.  Our attorneys have worked with hundreds of physicians from all across the country.

 We specialize in physician employment agreements

We specialize in physician employment agreements

Standard Clauses in Physician Employment Agreements – The Non-Solicit Clause

Physician Employment Agreements – Non-Solicit Clauses:  What Do These Look Like?

Typically, there are two kinds of non-solicit agreements for physicians:  (1) non-solicitation of practice patients, and (2) non-solicitation of practice employees.  Below is an example of each:

Non-Solicitation of Patients

During the term, and for 12 months thereafter, Physician may not solicit patients of the Practice.  However, following termination of employment, Practice will honor patients’ freedom of choice and upon a patient’s request will inform the patient of Physician’s new contact information.

Non-Solicitation of Employees

During the term, and for 12 months thereafter, Physician may not recruit, solicit, or induce to terminate their employment or other relationship with the Practice, any employee or independent contractor of the Practice.

Physician Employment Agreements – Non-Solicit Clauses:  What Do These Mean?

Physician non-solicitation clauses are designed to prevent the departing physician from poaching the practice’s patients and people.  Really, these clauses seek to prevent a departing physician from messing with the practice’s business.  Seems fair enough, right?

Physician Employment Agreements – Non-Solicit Clauses:  Are These Enforceable?

It depends on how broad the physician non-solicitation clause is.  Generally speaking, the more narrowly drawn (i.e. the less restrictive) the non-solicit clause, the more enforceable it is.  The examples above are more or less reasonable and would likely be enforceable.  But we’ve seen some really over-reaching agreements.

The more important issue, practically speaking, is not whether the physician non-solicit agreement is enforceable, what really matters is whether the practice will seek to enforce it.

Physician Employment Agreements – Non-Solicit Clauses:  What Should I Do?

Duh … call an employment lawyer.  First of all, we’re delightful! 

Second, we can help you analyze how enforceable your non-solicit agreement is, the likelihood of your former practice seeking to enforce it, and what you can do to protect yourself.

We have handled hundreds of physician employment agreements throughout the country.  If you need help reviewing, revising or negotiating your physician employment agreement, call or email us any time.  We are here to help.

Standard Clauses in Physician Agreements: The No Other Agreement Clause

Sample “No Other Agreements Clause”

You represent that you have not entered into any agreement with any other employer or party which would restrict your right to enter into this agreement or perform professional services as an employee of PRACTICE, and you understand that the PRACTICE has relied on this representation in offering you this agreement.

No Other Agreements Clauses – What Does it Mean?

Basically, these “No Other Agreement” clauses prohibit you from working for a practice when that work would violate another agreement - like a non-compete.

So, say you are a pediatrician and have a non-compete with Practice. Practice A’s non-compete says that you cannot practice pediatrics within a 5 mile radius of the primary location of Practice A.  You quit Practice A and move on to Practice B (congrats on the new job!).  Practice B hands you an employment agreement with a No Other Agreements clause.  If you were to sign Practice B’s employment agreement, not only would you be violating you non-compete with Practice A, you would also be violating your new agreement with Practice B, by certifying (incorrectly) that you are not prohibited from working for Practice B by any other agreement.

No Other Agreements Clauses – what should I do?

Before you move on to practice B, you need to make sure you understand your agreement(s) with practice A.  More often than not, you can do this yourself.  Just look out for things in your agreement(s) with Practice A that impact your future.  These are usually called “Restrictive Covenants,” which is a umbrella term that includes, among other things, non-competes, non-solicits and non-disclosures.  You do not have to be a genius to figure this stuff out on your own, but if you want to make sure, or just don’t have the time to put into it, you can also call an attorney who can walk you through every step of the process.

If your no prior agreements inhibit your ability to work for your potential employer, then this clause is fine. If there is a roadblock, it is definitely time to call an attorney and work out a plan.

Want Help with your Physician Employment Agreement?  Contact us – we can help.  Our attorneys have worked with hundreds of physicians from all across the country.

Email or Call any time.