For Cause Termination of a Physician Employment Agreement

For cause termination of a physician employment agreement can have a huge impact on your career, so these provisions must be reviewed and negotiated.
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For cause termination of a physician employment agreement is obviously a delicate issue. Employers have a  legitimate desire to make sure they can terminate a physician’s employment agreement if the physician turns out to be a lousy physician, or if patient demand just doesn’t justify paying the physician any longer.

A physician employment agreement should provide reasonable protection to both the physician and the employer if either party fails to live up to the bargain. That’s the whole reason for having for cause termination of a physician employment agreement. However, too often for cause termination of a physician employment agreement is based on nebulous language that allows an employer to terminate “for cause” even though the physician has done nothing wrong.

For example, for cause termination of a physician employment agreement can sometimes be based upon an employer’s “determination” of a breach. I always try to require such determination to be a reasonable determination made in good faith.

Although you can see the employer’s point in providing for cause termination of a physician employment agreement if a physician is accused of a crime (would you want to send your kid to a pediatrician who is accused of child abuse?), sometimes I am able to convince the employer that only an actual conviction will suffice as grounds of “for cause” termination.

Another common ground of for cause termination of a physician employment agreement is loss or suspension of medical staff privileges. Although that’s reasonable if you are tossed off the medical staff after a due process hearing, these provisions should provide that a temporary suspension for administrative reasons (such as untimely charting) is not grounds for termination of the agreement.

The agreement should also provide reasonable flexibility for both parties to get out of the deal, even if the other party didn’t do anything wrong – or “without cause” termination of physician employment agreements

In legal jargon, the phrase for cause termination of a physician employment agreement means the other party breached the agreement. A party can terminate the agreement for cause if the other party didn’t do what it was supposed to do, or did something it wasn’t supposed to do. It;s important that the grounds of a for cause termination of a physician employment agreement are clear, unambiguous, and reasonable. 

Of course parties can also use “without cause” (or “not for cause”) terminations, even though the other side didn’t do anything wrong.

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Dennis Hursh

Dennis Hursh

Dennis Hursh has been providing healthcare legal services in Pennsylvania since 1982. Since 1992, he has been a physician's lawyer serving as Managing Partner of Physician Agreements Health Law. Dennis has devoted his life to serving physicians and medical practices. He is the author of the definitive book on physician contracts "The Final Hurdle - a Physician's Guide to Negotiating a Fair Employment Agreement, and a frequent lecturer on physician employment agreements.

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