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Physician Employment Contracts: Penalties for Breach of Contract and Liquidation Clauses. - YouTube
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Hello everyone. Imagine this scenario: When聽
you are in the middle of your employment,
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you are told that you are in breach聽
of contract or that your contract is聽聽
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terminated because of something you did, and聽
that you are now responsible for the huge聽聽
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related penalties. You might not even be aware聽
that these penalties existed. To your surprise,聽聽
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they even point you to the terms in the聽
contract that you signed. When this happens,聽聽
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it might be too late for a remedy. You need to聽
avoid being in such a situation to begin with.聽聽
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So how do you do this? My name is Premkiran聽
Reddy, Founding Attorney of Reddy's Law Firm.聽聽
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In this episode, I will lean on my training聽
and experience in both the Medical and Legal聽聽
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fields to answer these questions. So before you聽
begin the employment, when you read the contract,聽聽
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watch carefully for what the consequences聽
of breaching or terminating the contract are.聽聽
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Know what the terms and conditions are聽
for termination and breach of contract聽聽
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and negotiate before you sign the contract. If the聽
employment is really bad and you want to get out,聽聽
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you know ahead of time what the costs will be聽
and can plan accordingly. In an earlier episode聽聽
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we talked about what the for cause terminations聽
are, including those conditions which when breached聽聽
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triggered termination of the contract. We also聽
talked about the without cause terminations聽聽
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where the contract may be terminated for any聽
reason as long as the required notice is given.聽聽
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So if the contract is terminated聽
for any of the above reasons,聽聽
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what are the consequences or聽
penalties for breach of contract?
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If you were given a sign-on bonus or travel聽
expenses, would you have to give the whole or聽聽
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a portion of it back? What about your benefits聽
like health or malpractice insurance? Will they聽聽
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end on termination or is there a provision for聽
you to extend benefits till you get another job?聽聽
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How will your retirement funds be transferred?聽
Are there any other restrictive clauses that聽聽
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do not allow you to work in a certain聽
radius for a certain number of years?聽聽
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Would that affect you seeking another employment?聽
Your contract may also have a liquidated damages聽聽
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clause whereby if you are found to be the聽
cause for the breach of contract or termination聽聽
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you would have to pay say for instance $800聽
a day until they find a suitable replacement.聽聽
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You may negotiate to have this clause removed聽
or rewritten to reflect the reasonable number聽聽
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it would actually cost them to replace you. This聽
number can be reduced by any mitigating they might聽聽
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do such as hire a temporary replacement. Don't forget聽
about complying with state laws and regulations聽聽
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which may require physicians聽
to contact and notify patients聽聽
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of the relocation or termination of their practice.聽
Not only this, but physicians might also face civil聽聽
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and regulatory liabilities for patient abandonment聽
if they don't follow these laws and regulations.聽聽
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Physicians may also need to notify聽
the appropriate licensing boards聽聽
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of their new address. Don't forget about the time聽
frame restrictions in which these have to occur.聽聽
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Failure to do so can result in disciplinary聽
action by the appropriate licensing board.聽聽
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Contact your legal team and your state licensing聽
board to find out what the applicable laws and聽聽
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regulations are and what steps need to聽
be taken in order to comply with them.聽聽
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To recap, there may be many reasons for terminating聽
a contract like certain conditions that are not聽聽
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met, for cause terminations, without cause聽
terminations and the like. These might聽聽
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have huge penalties and consequences like giving聽
back money or other restrictions on your ability聽聽
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to seek the next employment. There also may be聽
other procedures and laws you have to follow.聽聽
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Know your exit strategy and you won't be聽
caught unawares. Please also be on the lookout聽聽
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for my various other topics including other聽
Contracts, Ethics, Health Law, Malpractice and聽聽
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Dispute Resolution. thank you for watching聽
and hope to see you in the next episode. Bye-Bye
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