Not Giving the Notice Required Under a Physician Employment Agreement

The cost of failing to give the notice required by your physician employment agreement can be substantial, and the effect on your reputation could be worse.
notice required under a physician employment agreement

I have had several physicians ask me if there is any reason why they can’t just give two weeks’ notice (or so) and leave a bad situation, even though their physician employment agreement requires notice of significantly longer. Having scoured the contract, they usually inform me that there is no penalty provided for leaving early.  Accordingly, the physician usually feels that the employer won’t be able to do anything to them if they simply skip out early. They ask me “After all, what can they do to me?”

Unfortunately, the real answer as to what they can do to you is “Quite a bit, actually.”

Money Damages if you Breach your Physician Employment Agreement

Although your physician employment agreement may not lay out the employer’s rights if you leave without giving the required notice, there is a large body of contract common law squarely on the side of the employer. It has long been established that where a party breaches the agreement (which is what you are doing if you leave without giving the required notice) the other party may recover its reasonable damages.

The damages to the aggrieved employer can be substantial. For example, if the employer must hire locum tenens to cover your patients, the cost of that locum tenens (minus what you would have been paid) could reasonably be claimed as damages. Although the physicians who work as locum tenens are not paid a princely sum, the companies which arrange for their services are paid very handsomely – so this could be several times your salary for the required notice period.

Credentialing and Patient Notification

The ability of the prior employer to claim money damages is not all that a jilted employer can do to a departing physician. Unless you are staying in town, and maintaining privileges at the same facilities where you currently treat patients, the former employer is likely to be contacted as part of credentialing. Anything less than a ringing endorsement is considered a red flag in credentialing.

Since your new physician employment agreement probably has obtaining credentialing as a condition of the offer, placing credentialing in jeopardy is not something that should be done lightly. The last thing you want is to quit at your current employer and then have the new offer revoked.

Moreover, bear in mind that (unless you negotiated otherwise in your physician employment agreement) the employer will be notifying your patients of your departure. Here again, it would be infinitely better to have a positive (or at least not negative) notification sent to your patients.

The Golden Rule

Finally, the employer may owe you money for things like unused vacation, accrued bonuses, or other benefits under your agreement. What do you think your odds of collecting that money look like if you breached the physician employment agreement that gave you those rights? Even worse, I have seen employers refuse to pay for tail coverage, even though the physician employment agreement provides that they will pay for that coverage.

Attorneys like to quote what we call the “Golden Rule”, which is probably not the one you learned. For attorneys, the Golden Rule is generally stated as “The one with the gold rules”. In other words, the employer will be holding money that is owed to you. It will be up to you to pry that money out of the employer. Litigation is always expensive and chancy. Your odds of success decline if you have breached the physician employment agreement that is the basis for the lawsuit.

My Advice for Physicians Who Want to Leave Without Giving the Notice Required by Their Physician Employment Agreement

I almost always recommend sticking it out for the required notice period. Even if they have been jerks, it’s almost always better to take the high road and leave on the best terms possible. As noted above, if you leave early, you could be sued for the money the employer must spend to replace you. 

The employer may give you less than stellar recommendations in credentialing requests, and may also notify your patients in a way that doesn’t make you look good. Even worse, the employer could refuse to pay you money that is owed, or refused to buy tail coverage even though your physician employment agreement provides that they are responsible for that.

Don’t let the absence of a specific provision in your physician employment agreement lull you into a false sense of security. The monetary cost of failing to give the notice required by your physician employment agreement can be substantial, and the effect on your reputation can be even worse.

And next time, get your physician employment contract reviewed to protect yourself!

You may also be interested in my post about “without-cause” termination in physician employment agreements.

To learn more about the critical issues to be aware of when negotiating a physician employment agreement, you can see my podcast of  4 major issues in physician employment agreements, my physician employment agreement checklist or, for the most extensive discussion of the topic, my  book on physician employment agreements. For specific information on topics you might be interested in, see my posts about physician productivity compensationMGMA compensation analysismedical record provisions in physician employment agreementsletters of intent in physician contractsphysician covenants not to compete, and call coverage requirements.

If you would like us to review the new agreement, you can start your review here, or get a free consultation on how we can help.

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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, the first law firm in the country to focus exclusively on physician employment agreements. 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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Physician Prosperity Program

How It Works

After purchasing the physician contract review, you will receive an email asking you to transmit the agreement and any concerns you have to me. Many physicians do this by email, but I will be available by phone, too. In three business days from the time you purchase the Physician Prosperity Program® and transmit the draft physician employment agreement along with any concerns you have about the agreement and the information I will need to perform the MGMA analysis, you will receive a detailed physician contract review letter from me.

After you receive my physician contract review letter, you will have the opportunity to discuss it with me, to make sure all of your concerns were met, and to correct any factual inaccuracies, or to point out things that were verbally promised but didn’t make it into the physician employment agreement. These discussions, and revisions of the letter following these discussions, are included in the initial fixed fee.

Once you are completely comfortable with the physician contract review letter, you transmit the letter to your potential employer.