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All dental employment contracts should be negotiable. It is likely that the contract presented to you may not have been prepared with your best interest in mind. It may include provisions that are not appropriate for your given situation.
What will your employment classification be as an associate? It is critical that you understand the difference between being a W-2 employee versus an independent contractor. These can have different legal and tax implications. Determining which classification is best for you and your situation will depend on the employer, services to be provided, the employer’s legal structure, and future buy-in opportunities. Mixing or not understanding the two classifications can lead to an expensive mistake.
We understand that newly graduating/associating dentists are highly fixated on the proposed compensation plan. However, not all compensation structures are created equal and it is important to understand the differences. Is your compensation based on gross production, gross collections, or net collections? Are you penalized for write-offs and deductions? Are you assigned any compensation for ancillary services such as hygiene or x-ray production? Are supplies or lab fees deducted from your compensation? Will you be given access to the employer’s financial statements and accounting reports to determine and/or confirm collections and deductions?
Most dental contracts for new associates do not promise a set patient pool to provide production. This can make high initial production percentages meaningless if the practice fails to generate appropriate patient flow. Few practices are willing to assume the level of contractual risk associated with promising patients.
One of the most overlooked provisions of a dental associate contract is the termination provision. Most contracts provide for termination for serious issues, which are customary and to be expected. However, many contracts also provide grounds for termination based on extremely vague and legally undefinable actions that could prove to be a trap for the associate if not handled in the negotiation phase.
A restrictive covenant’s (or non-competition provision) enforceability depends on a multitude of factors that vary from state to state and community to community. It is foolish to believe that any restrictive covenant that you sign will not be enforceable. Instead, it’s best to negotiate the best terms possible, and then abide by them.
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