Employment Contracts CONTINUED FROM PREVIOUS PAGE
COVENANT NOT-TO-COMPETE
Non-compete clauses are almost universal in private practices, common with DSOs, and found increasingly in public health facilities. A non-compete provision stipulates that a departing employee will agree not to practice for a certain time frame within a specified geographic area. As an aside, non-compete restrictions are frowned upon in many states and there is a sustained effort to nullify these covenants altogether nationwide. But they are still enforceable, if reasonable, in most states. My observation has been that a 5-mile radius from the primary office for two years might be considered reasonable.
As a former employer myself, I can readily see and rationalize such restrictions. But in reality, most established practices do not lose many patients when a short-tenured dental associate moves on and resumes working in the restricted area. I believe it is reasonable to allow a new associate to work in the practice for 6 months before enforcing any non-com- petes. This provides what amounts to a test- drive for the employee before restrictions are in place. That being said, non-competes are usually more important to employers than to employees, unless the employee desires to remain in the immediate area following termination from their existing practice.
MENTORING/CONTINUING EDUCATION
New dental graduates often seek mentor- ship and expanded continuing education opportunities to enhance their skills. Cur- rent licensing requirements, fewer patients, decreased clinical graduation requirements and unexpected events like the recent pandemic, have all contributed to new grads having less experience in a growing world of dental knowledge. Consequently, most potential associates, at least initially, are looking for hands-on mentoring by a senior dentist and expanded continuing education. There are many examples of common dental procedures in which newer graduates from most dental schools have had little practi- cal experience performing on live patients. Procedures such as molar endo, milled
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crowns, implants, cosmetic procedures and clear aligners have been completed on few or no live patients prior to graduation. To compensate for this, many newer employees will require guidance and instruction on pro- cedures that might be commonly diagnosed in the employer’s practice. Having a reliable practice mentor today is a higher priority than perhaps in previous generations. It also provides an opportunity for the practice to ensure that required protocols and office standards are being adhered to.
Most DSOs offer practice models that place a more experienced senior doctor and a newer grad together in the same facility to accom- plish such mentoring requests and to ensure proficiency in modern dental procedures. Public health centers often follow a similar model. The private sector varies in its ap- proach. Some private practices have doctors who love to teach and mentor new dentists and others place new grads in locations by themselves with little internal coaching. A balance is needed to accommodate both employee and employer needs. Most DSOs and community health clinics provide either in-house or quality external continuing edu- cation courses to fill the gaps in knowledge for new employees. The private sector is find- ing it necessary to provide similar ongoing training to attract the strongest applicants. Increasing an employee’s skill set often ben- efits employee and employer alike.
TERMINATION
Almost all employment contracts clearly spell out how an employee can terminate or be terminated. In private sector contracts, a more frequently encountered condition is a penalty, usually described as “liquidated dam- ages,” for an employee’s failure to provide so many days’ notice before leaving the practice. The rationale is simple: If an associate doctor elects to terminate the employment agree- ment, a certain number of days of advance notice is necessary to allow the practice to find a suitable associate replacement. For each day less than the agreed-upon number, the employee would agree to pay the practice a stated dollar amount to compensate them for the cost of leaving early. As an example, if the stated penalty is $800 a day and the employee terminates 60 days prior to the
agreed 120-day advance notice, they would owe the practice $800 X 60, or $48,000 in liquidated damages. But because there are any number of scenarios one could imagine in which an employee would have no direct control over having to terminate early (e.g. family emergency, medical issues, pandemic), it might be reasonable to exclude these types of events from the liquidated damages provi- sion. Another situation involves the handling of employee accounts receivable if they are paid on collections as most private practice contracts stipulate. In the most efficient private practices, most outstanding account balances are collected within 90 days of the service being rendered. If the employee fulfills the termination requirements, the practice should consider collecting any accounts receivable for at least 90 days post-termination and remitting that amount to the departed employee under the agreed- upon collection formula.
In conclusion, there is no one-size-fits-all approach to dental employment contracts. There are only choices. Both employees and employers have a wide array of individual preferences. The most successful and long- lasting dental associate hirings are generally predicated on three criteria: 1) thorough due diligence of the contract by the employee and reasonable negotiations agreed to; 2) posi- tive interpersonal dynamics on both sides about the people involved and the overall office environment; and, 3) transparent and ongoing communication of expectations and responsibilities as the relationship matures. When both the employee and employer can articulate what is most important to them about the employment relationship, the chances of a mutually beneficial and long- lasting professional relationship are usually enhanced.
Dr. Thein is a periodontist and currently Associate Professor and course director of the dental practice management curriculum at UMKC School of Dentistry.
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