Dentist employment agreement: key provisions to read

This post is general education from Copeland Consulting Services. It is not legal advice. An attorney licensed in your state should read any contract before you sign it.

What does a dentist employment agreement cover?

It sets the terms of the job in writing: what you do, how you are paid, how long it lasts, and what you may do afterward. The ADA guide to key legal provisions describes an employment agreement as setting out “many of the details of an associate dentist’s employment, such as compensation, benefits, and duties.”

The same guide warns that some clauses reach past the last day of work. A restrictive covenant, for example, “may prevent the former employee-dentist from practicing in the geographic area of their choice.” Read those clauses first, because they are the hardest to change later.

The ADA also notes that an oral deal is open to gaps and different memories. A written agreement, if properly drafted, sets out each side’s rights and duties.

Which provisions deserve the closest read?

The ADA guide gives each major provision its own chapter. The table below lists them with a question to bring to your attorney. The questions are general prompts to discuss with your own advisers. The provision names and descriptions come from the ADA guide.

For pay formulas, see the post on associate compensation models. For the employee versus contractor question, see employee or independent contractor.

What is the difference between a non-compete and a non-solicitation clause?

A non-compete limits where and when you may practice after the job. A non-solicitation clause limits who you may draw away from the employer. They are separate ideas, and one contract can hold both.

The ADA guide says a non-compete “in order to be valid, will almost certainly be limited to (i) a certain period of time following conclusion of the employment relationship, and (ii) a certain geographic area.” Whether a given clause is valid depends on state law, so this is a question for an attorney.

The ADA guide describes a non-solicitation clause as one that stops the employee from “actively soliciting employees, customers, suppliers or patients of an employer away from the employer.” The guide gives a plain example of its reach: such a clause can stop a dentist from hiring a hygienist or an office manager who worked for the former employer.

Questions to bring to your attorney:

1. Is the limit written as a non-compete clause, a non-solicitation clause, or both?
2. How is the area measured, and from which office or offices?
3. Does the time period start at the last day of work?
4. Does the clause change if the employer ends the job?
5. Does state law limit this type of clause?

What happens when the agreement ends?

The ADA guide says that without an agreement, employment is generally “at will,” though state laws vary. At will means either side can end it at any time, unless the end is otherwise unlawful. A written agreement usually changes that by setting a fixed term and allowing termination only for stated reasons.

So the term and termination section tells you how long you are committed, how you can leave, and how the employer can end the job. Check for notice periods on both sides. Check what is owed on the way out, such as pay for work already done.

Insurance matters here too. The ADA guide says the insurance section usually covers dental professional liability coverage and names which party buys it. The guide describes two policy types. An occurrence policy covers care given while the policy is in force. A claims-made policy does not cover a claim filed after the policy ends unless the dentist buys an extension known as “tail” coverage. Ask an insurance agent which type applies and who pays for malpractice insurance after you leave.

How are disputes settled?

The ADA guide says arbitration is “probably the most common dispute resolution provision in employment agreements.” In arbitration, a neutral person hears both sides and decides. The guide says that decision is enforceable by the courts and “almost always considered final.”

Mediation is a different process. A neutral third party tries to help both sides reach a compromise. Ask your attorney which process the contract requires, who pays for it, and where it takes place.

What is liquidated damages?

It is a clause that fixes an amount owed if a party breaches the contract. The ADA guide says it “should only be allowable in cases where the damages are not easily calculable or susceptible to quantification.” Ask whether any amount in your contract is tied to a real, hard-to-measure loss. Ask which breaches trigger it.

Why should an attorney review it?

Because clauses interact, and state law decides what is enforceable. The ADA contract page tells dentists to review legal terms about compensation, non-competes and more “with the help of a lawyer.” Bring the full draft, not a summary. Ask your attorney to mark what is negotiable and what is standard.

Keep a short list of your own priorities before the meeting. Pay and schedule matter now. Exit terms matter later. The ADA guide advises thinking about provisions “that may come into play at the end of the relationship or after its termination.”

Next step

Read the dental associate contracts guide for more on how these agreements work. Then contact Dr. Copeland about consulting. Dr. Jon Copeland, DDS, is a general dentist in Wildwood, Missouri.