You've found what seems like the perfect physician position. The salary looks good, the location is right, and the practice seems like a great fit. But before you sign on the dotted line, that employment contract deserves serious scrutiny.
After reviewing hundreds of physician contracts, we've identified the most common red flags that can cost you tens—or even hundreds—of thousands of dollars over your career.
1. Overly Broad Non-Compete Clauses
The Red Flag: A non-compete that covers a 50-mile radius for 3+ years, or one that includes specialties you don't even practice.
Why It Matters: If this job doesn't work out, you may be forced to uproot your family and move to continue practicing medicine in your specialty.
What to Negotiate: Push for a smaller radius (10-15 miles in urban areas), shorter duration (1 year max), and specific exceptions for hospital privileges.
2. No Tail Coverage (Malpractice)
The Red Flag: The contract provides claims-made malpractice insurance but doesn't specify who pays for tail coverage when you leave.
Why It Matters: Tail coverage can cost $50,000-$200,000+ depending on your specialty. If you're responsible for it, leaving becomes extremely expensive.
What to Negotiate: Request that the employer pays tail coverage if they terminate without cause, or negotiate a "nose" policy with your next employer.
3. Vague Termination Clauses
The Red Flag: The employer can terminate "for cause" with broad, undefined reasons, or "without cause" with minimal notice.
Why It Matters: You could lose your job with 30 days notice, triggering non-compete clauses and leaving you scrambling.
What to Negotiate: Require specific, objective definitions of "for cause" termination. Push for 90-180 days notice for without-cause termination.
4. Unrealistic Productivity Expectations
The Red Flag: RVU targets that seem high, or vague language like "productivity consistent with peers" without specific numbers.
Why It Matters: You could hit your "base salary" ceiling quickly and find yourself working harder for diminishing returns—or miss targets and face termination.
What to Negotiate: Request historical productivity data for physicians in similar roles. Get specific, written targets.
5. One-Way Termination Notice
The Red Flag: The employer can terminate with 30 days notice, but you must give 90-180 days.
Why It Matters: You're trapped in a bad situation while they can let you go quickly.
What to Negotiate: Ensure notice periods are equal for both parties.
6. Restrictive Moonlighting Clauses
The Red Flag: A complete prohibition on any outside medical work, including telehealth or expert witness work.
Why It Matters: These side opportunities can provide significant additional income and professional development.
What to Negotiate: Allow moonlighting with prior written approval, or carve out specific permitted activities.
7. No Moving Expense or Signing Bonus Forgiveness Schedule
The Red Flag: You must repay your entire $50,000 signing bonus if you leave within 3 years, even if you leave after 2.5 years.
Why It Matters: A pro-rated forgiveness schedule is standard. Without it, you're effectively trapped.
What to Negotiate: Require pro-rated forgiveness (e.g., 1/36th forgiven each month for a 3-year commitment).
8. Unclear Call Coverage Responsibilities
The Red Flag: "Call coverage as needed" or "shared call with the group" without specifics.
Why It Matters: You could end up taking call every other night when you expected once a week.
What to Negotiate: Specify exact call frequency, compensation for call (if any), and any call pools.
9. Automatic Assignment Clauses
The Red Flag: The employer can assign your contract to any successor organization without your consent.
Why It Matters: Your dream practice could be acquired by a large health system you'd never work for.
What to Negotiate: Require your consent for any assignment, or the ability to terminate without penalty.
10. Intellectual Property Overreach
The Red Flag: The employer owns any inventions, publications, or intellectual property you create, even on your own time.
Why It Matters: That app idea you develop on weekends? That textbook chapter you write at home? They could claim ownership.
What to Negotiate: Limit IP assignment to work specifically related to your employed duties during work hours.
11. No Compensation Transparency
The Red Flag: The contract references compensation formulas, RVU rates, or bonus structures that are in separate documents you haven't seen.
Why It Matters: The actual economics may be very different from what you expect.
What to Negotiate: Insist on seeing all referenced documents before signing. Get specific numbers in writing.
12. Weak Restrictive Covenant Exceptions
The Red Flag: The non-compete has no exception if the employer terminates you without cause.
Why It Matters: They can fire you for budget reasons and still prevent you from practicing locally.
What to Negotiate: Non-compete should be void if employer terminates without cause, or if they materially breach the contract.
Before You Sign
- Hire a healthcare attorney - $500-$1,500 for a contract review is cheap insurance against a bad deal
- Don't be afraid to negotiate - Most employers expect it
- Get everything in writing - Verbal promises mean nothing
- Talk to current physicians - Ask how their experience matches their contract
Remember: The contract you sign today will govern your professional life for years. Take the time to get it right.
Need help evaluating a physician contract? Check our Resources page for contract review checklists and negotiation guides.