The work contract exists to document the existence of a relationship.
What kind of relationship is it? Is it a rather personal, close one or a rather corporate and impersonal relationship? Is the chosen practice a well established, independent one, which caters to whole families who appreciate the availability and the competency of the dentist owner who know everyone and who is present everyday? Or are we talking about joining a chain or many clinics in which the owners are busy at the head office and the practicing dentists often change clinics, therefore not being able to build close relationships with both the staff and patients?
It will often be easier to negotiate the terms and conditions of an employment agreement with an independent owner, who is more flexible, than with a corporation tied in a strict, established and most likely severe corporate framework, set in place to protect the interests of many shareholders.
An example of this situation might be the extent of the territory covered by a non-compete clause which will be much larger in a contract with a corporation operating many clinics than in a contract with a single clinic.
Let’s consider the example of a single independent practice located in a suburb. A non-compete clause, which aims at protecting in a reasonable manner the dentist owner from unfair competition which might be caused by an associate dentist who leaves the practice, might state that an associate who leaves the practice shall not, for a term of two years, work in a dental practice in a perimeter of five kilometers from the practice which used to employ him. The five kilometers distance is considered reasonable by considering various factors, including the total population living at a reasonable distance from the practice, the number of the practice’s active patients living within such a reasonable distance and the (weak or strong) competition from other dentists in the same sector.
An associate dentist leaving this practice might successfully open a new practice at the other end of the town. Or, because of demographic factors, geographical factors and existing competition, have difficulty to find a suitable location to keep working in the same city.
This might seem acceptable to some, whereas it certainly isn’t for others. Let’s imagine a dentist who grew up in this town, who is well established there with his whole family and for whom moving might be a nightmare, which seems probable if his spouse works in town and the kids go to a great school nearby…
For a young dentist who does not have kids yet, this situation is probably acceptable: moving is not that hard. But what would the situation if this dentist had signed an employment contract with a corporation running many clinics?
In many instances, it will not be easy for this dentist to keep working without going far from his actual residence, and even to find a location for work which he likes. If a corporation owns many clinics, it is very likely that its employment agreements mention that a dentist who leaves its employment shall not compete with the corporation’s clinics with a perimeter of a few kilometers surrounding not only the clinic where the dentist used to work, but also from the corporation’s other clinics! The problem might be more complicated than it seemed at first.
Some will consider that a Court might only consider unreasonable, and therefore invalid, a non-compete clause which causes a serious prejudice to a former employee, and thus, that the fact of signing a contract including such as clause is not so important.
They are sadly mistaken.
The real question which dentists who consider signing an employment agreement should ask themselves is not to know if a tribunal would render a decision to the effect that a non-compete clause is abusive, but rather if they are ready to spend the time and money to eventually find out.
The judicial process is slow and costly. Would you be ready to spend dozens of hours, thousands of dollars and years to get a decision concerning your right to work at a certain location, without knowing what this decision will be?
You must also consider that, if you quit your job looking to purchase an existing clinic or open a new clinic near the clinic you are leaving, financial institutions might not want to lend you money for a project locate within the territory mentioned in your employment agreement’s non-compete clause, for fear to see their investment at risk because of lengthy, costly legal proceedings which might end up being in favour of the suing dentist.
This is only an example to consider.
Please do not try to analyze yourself the proposed contract and its consequences for your future. Your University classes did not prepare you to do so. I do not try to fix my teeth myself.
Before concluding an employment agreement, you must take the time to communicate with your lawyer what are your objectives for your future, your motivations, what might be acceptable, what is not negotiable, and why. Imagine that you are leaving on a trip: if you do not mention a specific destination to your travel agent, and your motivations to choose it, then your agent will be very hard pressed to advise you as best as he can. In this case, the trip you are about to take is your future: please give your lawyer as much information as possible to properly negotiate the conditions which will make you arrive at the destination of your choice.
How far do you want to go?
The more you participate in the negotiation process, and communicate with your lawyer, the better your results will be. Think about the situation, ask questions and do not hesitate to let it be known what matters the most to you, and why you should obtain it. Give your lawyer a clear mandate, so that he may better represent your interests.
To properly negotiate your remuneration, beyond the salary, benefits and schedule, you must be realistic, reasonable. It will be difficult (but not impossible, and possibly beneficial) to ask from a small dental practice to offer a benefits package in the absence of an existing program. On the other hand, your arrival at the clinic is an opportunity to set one up. The total cost for the employer must be considered, according to the number of employees, the desired program, and the positive effects for the employer who might find productivity improving, absenteeism reduced, the troops’ morale improving…
Giving Your Departure Notice…At the Right Time!
You are thinking about opening your own practice. You do your research, and finally find a perfect piece of land to build your dream clinic, which might be quickly built…You wonder when to give your employer notice of your departure, even if your employment agreement mentions that you must give it at least 120 days in advance.
What should you do?
Your employment agreement and your relationship with your employer must be considered. In theory, it is always better to respect the terms of your contract. But you should not forget that an employer can fire you without respecting the 120 days rule. Will you be paid for those four long months before the opening of your new clinic? Does your contract mention that you will be paid for work performed before your departure if you leave or that you will not receive any remuneration once gone? Are you giving your employer enough time to replace you without causing him important financial losses?
It might prove preferable to give your notice only once you have on hand a signed contract which precisely mentions the opening date of your new clinic. Do not only sign a simple letter of intention (LOI) for the construction of your new clinic before giving your notice: a LOI is only a preliminary document before the conclusion of a final deal.
Have you properly documented the sums which your soon-to-be ex-employer might owe you? Do you have copies of the daily reports and other production reports to precisely know how much you should receive?
Never forget that the documents relative to your production will help you demonstrate what you are capable of to financial institutions who will be more inclined to finance your projects once they have seen evidence of your performance.
If your employer fires you, and refuses to pay you, will you still be able to finance your project or were you relying on those four months or revenue to pay some costs?
Each case is different. Nevertheless, try to maintain good relations with your future ex-employer, who may, one day, maybe, help you. Or sell you his practice, to quench your thirst for expansion.
Think about it and talk to your lawyer! (Call me anytime)