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contract termination agreement

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  • Avatar nephron 
    Participant
    Status: Physician
    Posts: 273
    Joined: 05/09/2019

    My partnership contract agreement has a termination clause which states that I have to pay the practice $60,000 if I fail to give 12 months notice or if they fire me with cause.   Does anybody else have a similar clause in their contract?   Seems extreme to me.

    #228067 Reply
    wonka31 wonka31 
    Participant
    Status: Physician
    Posts: 714
    Joined: 03/24/2018

    That sounds very unusual. 12 months notice is insane, I hope you didn’t/don’t sign that.

    #228072 Reply
    Avatar ZZZ 
    Participant
    Status: Spouse
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    Joined: 06/18/2018

    Better be a sweet partnership to put crazy terms like that in there.

    #228073 Reply
    q-school q-school 
    Participant
    Status: Physician
    Posts: 2640
    Joined: 05/07/2017

    Is it in lieu of non compete?

    #228074 Reply
    Avatar nephron 
    Participant
    Status: Physician
    Posts: 273
    Joined: 05/09/2019

    My state does not allow non-competes.   Haven’t signed it yet, trying to get it removed.  My employment contract lawyer said that he had seen similar clauses in other contracts, but it still seems a bit crazy to me too, like being handcuffed to the job.

    #228076 Reply
    Liked by wonka31
    Avatar Eyedentist 
    Participant
    Status: Physician
    Posts: 15
    Joined: 01/09/2016

    I am also in a no non-compete state. I  good friend was just given a partner contract that has 18 month termination notice. INSANE.

    #228078 Reply
    q-school q-school 
    Participant
    Status: Physician
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    Joined: 05/07/2017

    My state does not allow non-competes.   Haven’t signed it yet, trying to get it removed.  My employment contract lawyer said that he had seen similar clauses in other contracts, but it still seems a bit crazy to me too, like being handcuffed to the job.

    Click to expand…

    That’s what i thought.

    not unusual.

    #228083 Reply
    CordMcNally CordMcNally 
    Participant
    Status: Physician
    Posts: 3047
    Joined: 01/03/2017

    Seems crazy.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #228085 Reply
    Liked by Zaphod, Tim, Peds, q-school
    Avatar pulmdoc 
    Participant
    Status: Physician
    Posts: 434
    Joined: 09/19/2016

    Wait, if you get fired for cause you ALSO have to pay the group $60k??? That seems extremely punitive.

    The 12 month notice is a long time, but it depends on how long it would reasonably take the practice to fill your position. If you are in a group in a small town that takes a year to recruit someone, having a long notice makes more sense. If it’s a big city with multiple residency programs churning out new grads every year, a year is punitive.

    #228233 Reply
    Avatar jhwkr542 
    Participant
    Status: Physician
    Posts: 1335
    Joined: 02/15/2016

    This sounds like a non compete clause in sheep’s clothing

    #228234 Reply
    nachos31 nachos31 
    Moderator
    Status: Physician
    Posts: 432
    Joined: 01/12/2016

    This sounds like a non compete clause in sheep’s clothing

    Click to expand…

    Bingo. I’ve most commonly seen 3 months’ notice and occasionally 6 months’ notice but anything more is over the top. How about you work in that if you leave for cause then they have to pay you $60k?

    #228255 Reply
    Liked by hatton1, SLC OB
    jfoxcpacfp jfoxcpacfp 
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    Status: Financial Advisor, Accountant, Small Business Owner
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    Joined: 01/09/2016

    I think we have one client with those terms, but that’s all. I attempt to review contracts for all planning clients – most are 60 – 90 days. But in a state allowing no non-competes, it can make sense. Imagine yourself in the employer’s shoes.

    Of course, depends on your specialty. For some, I really don’t get the purpose of a non-compete other than punitive.

    Johanna Fox Turner, CPA, CFP: I am not your financial advisor; any responses are for general purposes only
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #228274 Reply
    Liked by Vagabond MD
    Avatar wcinewbie 
    Participant
    Status: Physician
    Posts: 92
    Joined: 09/30/2017

    I think there is some confusion in this thread about the OP’s position.  While I don’t know what specialty or practice situation the OP is in, they identified themselves as a partner.  While non competes are unenforceable in some states, this typically refers to employee physicians, not business partners.  A partnership is much more complicated to wind down than a typical employed physicians practice; a sudden departure of a well established physician can be devastating  to the practice’s finances.  Our practice requires an 18 month termination notice for partners with penalty against their buyout if they leave early.

    #228277 Reply
    Liked by jfoxcpacfp, Zaphod
    Zaphod Zaphod 
    Participant
    Status: Physician, Small Business Owner
    Posts: 6335
    Joined: 01/12/2016

    Absolutely, non competes do not usually apply to partners, this is true even in california.

    #228282 Reply
    q-school q-school 
    Participant
    Status: Physician
    Posts: 2640
    Joined: 05/07/2017

    What does the contract say about tail insurance?

     

    #228314 Reply

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