Any physician considering an employment opportunity should strongly consider what the terms of their contract are. What are the pros? What are the cons? What items are spelled out well? What items remain vague or unclear? It is important to know and understand what the terms of your contract are in hopes of avoiding any disputes as the employment relationship starts, develops, and ends.
But why? Sure, contracts are legal documents, but how much do they really matter if the employer or employee files a lawsuit? What if your employer orally promised not to enforce certain provisions of the contract that you took issue with before signing? What if they ensured in email that you’d have a certain schedule or equipment, and never followed through?
This blog outlines some basic topics in contract disputes that physicians should be aware of as they consider their employment opportunities. Our hope is that having this perspective will illustrate the gravity and stakes behind these employment agreements and emphasize why negotiation should be carefully considered prior to signing.
Parol Evidence is Excluded
Most often, whatever the terms of the contract are, is what will prevail and be held as enforceable on both parties in a contract dispute. In fact, a judge or jury in such a case may not even be able to consider your argument that the employer gave their word that the noncompete isn’t enforced or you won’t be required to take call more than twice per month.
Simply, the Parol Evidence Rule says that if something isn’t officially written in the contract, you usually can’t use it as evidence in court. This applies to any promises or agreements made before or at the time of signing—whether spoken or written—if they aren’t included in the contract itself. Essentially, the contract is what legally matters, not side conversations or extra assurances.
Certainly, your specific situation may have some exceptions that allow parol evidence to enter the legal conversation, but these exceptions are often limited and only apply if they resolve some ambiguity in the contract or are a legitimate extension of the contract in some way. If whatever you have to say is contradictory to the terms of the contract, then you are not in a favorable position.
This is not to say that any prior or contemporaneous agreements are completely useless. From a litigation perspective, there’s not a lot of utility, but it could be useful to help keep management accountable to the things that they promise to you as you’re coming onto the job. Especially if your exit strategy is clear and relatively actionable, having an email saying that you would be allowed to do something or that you would be provided with a certain resource can have significance in keeping some leaders accountable for those promises.
In sum, the assumption should be that the terms of the contract are enforceable. Even if leadership tries to quell your suspicions or provide you with assurances that nothing bad will happen, the employer can bring a claim against you if they feel there are grounds to justify a breach of contract claim. Unless your negotiation process yields a true change to the contract prior to your signing, you likely cannot rely on parol evidence to nullify or modify any terms of that contract.
The Human and Economic Costs of Litigation
Some physicians have a drastically oversimplified view of contract disputes. They gloss over the fact that civil suits often take years to fully adjudicate. Courts are often backlogged with criminal cases to hear, which consequently pushes civil suits to the back of the line. Since criminal cases have liberty interests at stake, they will take priority. Couple this long process with the stress that comes with knowing that nothing about fighting a lawsuit is certain. Any case could have very favorable facts, but what may appear as a minor fact could change the whole course of the proceedings, and a judge or jury could rule against you. Physician work is complicated and stressful enough, so adding a lawsuit to the mix is not doing anybody any favors for minimizing stress and potential burnout.
Litigation lawyers are expensive!! Those who practice in civil litigation are very experienced and talented individuals, and the price tag reflects that. Whether the attorney represents the physician or the healthcare employer, you often must be prepared for a high five-figure or even six-figure exposure in legal costs alone.
Thus, it is critical that physicians get to know the terms of their contract and prioritize negotiating thoughtfully and strategically in order to give proper consideration to any employment offer. In spite of vast earning potential, it’s doubtful that any physician is well-equipped to fund and endure a six-figure, stress-fueled lawsuit. An ounce of prevention is worth a pound of cure.
Fillmore v. Saint Alphonsus
There is an active case going on in Idaho between a trauma surgeon and his former employer. There are multiple allegations within the lawsuit, but one of the chief complaints is the noncompete clause that Dr. Fillmore had tried, unsuccessfully, to negotiate out of prior to signing. Administrators assured Dr. Fillmore that he didn’t need to worry about the noncompete clause (which was a 90-mile restriction on his practice of medicine), and, despite his qualms with the language, he decided to move forward with signing and working for St. Alphonsus.
The court documents suggest a relationship between Dr. Fillmore and Saint Alphonsus soured eventually, resulting in Saint Alphonsus dismissing Dr. Fillmore from his position after disagreements over compensation. Relying on the administrators’ promises that the noncompete was merely a “scare tactic,” Dr. Fillmore started another job with another system in the restricted territory, only to receive a cease and desist letter from Saint Alphonsus. The letter alleged that both Dr. Fillmore and his new employer that Saint Alphonsus, could take legal action against both parties. Dr. Fillmore’s new employer felt safer in terminating the relationship than risking any sort of lawsuit, and consequently, terminated the relationship after receiving the cease and desist letter.
There is no clear indication as to the trajectory of this case—again, nothing is certain in litigation. In light of the above principles, however, physicians would do well to understand and strongly consider the terms of their contract and how the decisions they make during employment AND after termination can alter the course of their lives and careers.
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