0:01

The employment agreement will address in a number

0:03

of ways the term of employment,

0:05

including the commencement date of the agreement.

0:08

The commencement may be a specified date

0:10

where there may be financial, other consequences if the term

0:13

of employment does not commence on the particular date.

0:17

It could also state that the employment will commence on a

0:20

date that's mutually agreed by the parties.

0:23

It's really important if there's gonna be a specified date

0:26

where employment must start, that the employee's able to

0:30

actually meet the obligation.

0:32

There are many circumstances where, uh,

0:34

physicians finish up their residency program or a fellowship

0:38

and want to take time off before starting work,

0:42

and that may conflict with the employer's need

0:45

for having coverage start at an earlier date.

0:48

So the parties need to have a solid alignment on when the

0:51

actual scope of employment will begin.

0:54

Uh, in addition to addressing the commencement date,

0:57

there may be conditions that have to be satisfied prior

1:00

to the physician commencing his or employment.

1:03

For example, the physician may need a specific state license

1:07

or specific hospital privileges

1:09

before they can actually commence performing services.

1:12

It's important for the employee to understand

1:16

if there are conditions precedent to commencing employment,

1:19

who's responsible for satisfying those?

1:21

Will it be the employer that's leading the charge

1:23

to go get the state license

1:25

or the hospital privileges addressed,

1:28

or is that gonna fall on the employee to go

1:30

and actually panel this on his or her own?

1:34

Once you've established the commencement date, you also need

1:37

to understand the actual initial term of employment.

1:40

It's not uncommon for employment agreements

1:42

to have 1, 2, 3 years,

1:45

but in my mind, it makes sense

1:46

for the employment agreement's initial term to coincide

1:49

with the anticipated date on which the employees offered an

1:52

opportunity to be an owner

1:54

or a shareholder in the practice itself.

1:57

The employment agreement will additionally address

1:59

what happens once the initial term of employment expires.

2:03

Will it automatically renew

2:05

unless one party elects not to exercise a termination?

2:08

Right? Will it actually just terminate at the end

2:12

of the initial term unless the parties agree

2:14

to mutually extend the term?

2:16

These are issues that the employment agreement should

2:18

address, and the employee needs to understand his

2:22

or her rights and obligations.

2:24

For example, the agreement may provide that you have

2:27

to provide an extended period of notice 180 days

2:31

or more in order to make sure

2:33

that the agreement will actually expire.

2:36

It's also not uncommon for the employment agreement

2:38

to shift certain costs to the employee should he

2:42

or she elect not to automatically

2:43

renew the employment agreement.

2:45

For example, the cost of tail insurance,

2:47

which we'll discuss later in this presentation,

2:50

make it shifted to the employee if he

2:52

or she elects not to automatically

2:54

renew the employment agreement.

2:56

That's why it's important for the employee to understand

2:59

Whether or not there's a renewal

3:01

of the employment agreement

3:03

and any consequences that are associated with renewal.

3:05

It's also important to understand if the compensation model

3:09

that the physician is under, under his

3:11

or her employment agreement will actually change

3:13

during this extended renewal period.

3:16

If it's not gonna extend

3:18

or change, the employee may want to have the leverage

3:21

of having the employment agreement just simply expire at the

3:24

end of its initial term to give him

3:25

or her maybe some additional leverage

3:28

to negotiate higher compensation

3:30

if they're not gonna join the group as a physician owner

3:33

or stockholder, or if they just desire

3:36

to seek additional higher compensation.