The Clause You Need to Know This Week
Each week we break down one clause that catches physicians off guard. Learn what to look for and how to prepare for informed contract discussions.
Non-Compete That Triggers on Without-Cause Termination
Why this clause can cost you your career — even when you did nothing wrong.
Many physician contracts include a non-compete clause that activates regardless of how the employment ends — including when the employer fires you without cause.
This means if your hospital decides to downsize or restructure, you could be locked out of practicing within a 30-mile radius for 1–2 years, despite having no say in the termination.
What to look for: Language like 'upon termination for any reason' or 'regardless of the cause of termination' in the non-compete section.
Consider asking: 'Can we add language stating the non-compete does not apply if I am terminated without cause?' This is a standard and reasonable discussion point.
Be cautious of any non-compete that penalizes you for the employer's decision to end the relationship.
The Tail Coverage Gap That Could Bankrupt You
Claims-made malpractice policies without tail coverage are a financial time bomb.
If your contract provides a claims-made malpractice policy but doesn't address tail coverage, you could face a $50,000–$200,000+ bill when you leave.
Tail coverage protects you from lawsuits filed after your employment ends for incidents that occurred during your tenure. Without it, you're personally liable.
Many physicians don't discover this gap until they're already planning to leave — by then, it's too late to discuss changes.
Consider asking about: Whether the employer will fund tail coverage if they terminate you without cause, or whether occurrence-based coverage is available instead of claims-made.
Always confirm who pays for tail coverage before signing. This single clause can represent a six-figure financial risk.
The RVU Threshold Trap: When Productivity Bonuses Are Unreachable
High RVU thresholds can make your bonus structure effectively meaningless.
Many contracts offer attractive per-wRVU rates — but bury an unrealistically high threshold before the bonus kicks in. If the threshold is set at the 90th percentile of national productivity, most physicians will never reach it.
This creates the illusion of upside compensation while functionally locking you into base salary only.
Compare the threshold against AAMC and national benchmarks for your specialty. If it's above the 75th percentile, that's a yellow flag.
Consider asking about: A lower threshold (50th–65th percentile) or a tiered structure where partial bonuses kick in at lower production levels.
A high per-wRVU rate means nothing if the threshold is unreachable. Always benchmark the threshold, not just the rate.
Termination Notice Asymmetry: When 90 Days Isn't 90 Days
Many contracts give the employer a shorter notice period than the physician.
A common — but often overlooked — red flag is asymmetric termination notice. The contract might require you to give 180 days notice, while the employer only needs to give 90 days.
This imbalance can leave you scrambling to find a new position while your employer has plenty of time to replace you.
Equal notice periods (typically 90 days for both parties) are the industry standard and a reasonable discussion point.
Consider asking about: Matching notice periods. If the employer requires a longer physician notice period, consider inquiring about a corresponding severance payment.
Termination notice should be symmetric. If you owe 180 days, they should too — or compensate the difference.