Surgeons should carefully evaluate employment contracts before signing

At a Glance 

• Market compensation data helps surgeons assess whether salary, bonuses, and productivity targets are aligned with current benchmarks.
• Contract terms governing schedule, call responsibilities, work location, and termination provisions can have long-term career implications.
• Reviewing agreements with an experienced healthcare attorney and negotiating key provisions can help ensure a fair and sustainable employment arrangement.

Estimated read time: 4 minutes

Good physician employment contracts codify a mutual agreement between a surgeon and the organization they intend to join. The best agreements attempt to ensure the terms of employment are fully understood by both parties, reducing the likelihood anyone is surprised during the term of the agreement. When surgeons initially receive an employment contract, the language of the agreement oftens favor the employer’s interests. Employers have a duty to protect their interests and their bottom line. It’s important for surgeons to ensure their interests are also represented in the agreement they sign.

Unfortunately, what is best for the employer is not always best for the surgeon, and employment terms can range from slightly favoring the employer to disproportionately favoring the employer.

Employment contracts should be fair for both parties, and since an employer will draft the initial contract, it is up to the employee to advocate for themselves. Before signing anything, there are several key steps to make sure the contract is written fairly.

Understand compensation benchmarks
First and foremost, surgeons should verify they are compensated appropriately for their work. Determining fair compensation, however, can be challenging because it depends on factors such as subspecialty, geographic location, and data that is often not readily available.

Start by finding reputable, accurate sources of data on salaries, production numbers, signing bonuses, and more. With this data, physicians can better understand their worth in the current job market and know whether a compensation package is fair or below average. Employers often reference Medical Group Management Association (MGMA), American Association of Orthopaedic Executives, or other specialty-specific society/association data to determine the compensation they will offer.

Job candidates should always check the data to see how an offer compares to the norms. This research usually requires access to data, but other data sources are available, such as Resolve’s rData, which is provided via partnership with AAOS. Resolve, an employment contract review and negotiation company, created rData from the thousands of contracts the company reviews every year.

After reviewing the available data, surgeons should be able to determine whether an offer reflects fair compensation. If an offer falls below market benchmarks and warrants negotiation, the supporting compensation data can help justify proposed revisions to the package.

Review schedule, call, and location requirements
Being compensated fairly is important, but the numbers alone are not the full picture. Orthopaedic surgeons will want to consider work schedules, call hours, and location requirements stated in a contract, as they contribute greatly to work-life balance and have significant impact on job satisfaction in the long term.

Contract language concerning these aspects of the job should be specific and avoid broad language such as “hours as assigned by employer” or “locations as defined by employer.” Open-ended language leaves terms up to interpretation, which can allow employers to change schedules, work location(s), and more without the employee’s consent.

A vague and overly broad contract could result in unexpected shifts, uneven call responsibilities, or requirements to travel among multiple satellite locations. When contract language related to schedules, call coverage, or work locations lacks specificity, surgeons should seek clearer terms. Defining schedules, primary work locations, and call expectations in writing can help prevent future misunderstandings and provide important protections for work-life balance and overall well-being.

Plan an exit strategy
Although it may seem counterintuitive, the best time to consider an exit strategy is before employment begins. Surgeons should understand the circumstances under which either party may terminate the employment agreement, as well as the required notice provisions. A clear understanding of these terms can help prevent surprises should a surgeon decide to leave the practice or if significant workplace changes, such as a change in ownership, occur. These conditions should be clearly spelled out in the employment contract.

Surgeons should also understand any obligations, financial or otherwise, that might apply upon termination of the employment contract. Particular attention should be paid to noncompete clauses and other restrictive covenants, which should be carefully reviewed and, when appropriate, negotiated before signing. These clauses can complicate a future job transition and, in some cases, significantly limit employment options without geographic relocation.

Signing bonuses and stipends are a few of the financial obligations to keep in mind. These forms of compensation typically function like loans, which are forgiven over time, by working for the employer over a specific amount of time within the term of the employment agreement. If the doctor leaves before the repayment period is complete, contract terms may require immediate repayment of the remaining balance. Depending on the size of the bonus or stipend, this can suddenly become a large financial burden and may make a job change financially difficult.

Contact an attorney and negotiate
Physician employment contracts are complex documents with countless terms to consider, many of which are not covered here. These agreements can seem overwhelming, but there are professionals who can help surgeons review, understand, negotiate, and sign a fair contract. Just as surgeons specialize, so do attorneys. Before signing, it is always recommended to contact an attorney who has experience with surgeon employment contracts and who works specifically within the geography that the surgeon would be working in. State contract and employment laws vary.

The right attorney can suggest contract changes based on their experience, the existing offer, and the surgeon’s unique priorities. Some attorneys will even conduct negotiations on behalf of clients, which is particularly beneficial when an employer’s attorney or executive is on the other side of the negotiation table.

As the surgeon and attorney develop a negotiation strategy, the goal should be to create a fair agreement that serves all parties. Many physicians, especially new attendings, fear they will be asking for too much when requesting a compensation increase or other significant changes. However, concerns of this nature are generally unwarranted when proposed changes are supported by fair market data for the physician’s specialty and geographic region. Because employers also rely on market data, they typically will understand the rationale behind requests backed by objective compensation data, especially if the opening offer falls below market rates.

Ensure contract terms support long-term success
An employment contract should benefit both the employee and the employer. A fair contract is a reasonable expectation, and employers generally have an interest in ensuring surgeons are satisfied with the employment terms. Although employers usually seek to manage compensation costs, they are also motivated to recruit and retain qualified surgeons.

Given the ongoing physician shortage and the significant costs associated with recruitment, many surgeons remain in a strong negotiating position.

By understanding their market value, negotiating thoughtfully, and carefully reviewing contract terms, surgeons can help ensure that employment agreements support both their professional goals and long-term career success.

Andrew Wade, DHA is CEO of OrthoSC in Myrtle Beach, SC.