Reading Your Contract

The most consequential document you will sign

A physician employment contract has more financial impact than a mortgage. It controls income, exit terms, geographic restrictions, malpractice tail liability, intellectual property, and the conditions under which you can be terminated. Knowing what each clause means — before the deadline pressure — is the preparation most physicians wish they had done.

Read it like a consent form

A contract is an elective procedure: irreversible once performed, with the risks concentrated in the exit terms — and the consent conversation happens before the incision, not after.

Physicians run rigorous consent conversations every working day: the risks, in numbers; the alternatives, honestly presented; the explicit right to ask questions and to decline. The employment contract deserves the same discipline pointed in the other direction — and it rarely gets it, because the document arrives with deadline pressure and a cover email that says 'standard.' Run the parallel properly, and start with the part of the document that governs the exit. The termination article, the tail assignment, the clawback triggers, and the non-compete are not remote contingencies buried in the back half of the document — they are the terms that price leaving, and they are drafted long before anyone is thinking about leaving, the way a known complication profile is the planning basis for a procedure even when everyone hopes for the uncomplicated case. The risks section of this consent is the exit terms. The alternatives section is the negotiation itself plus any competing offer — an alternative exists only if it is developed before consent is signed. And the questions-before-signing step is the attorney review, which is the one part of the process where a trained second reader goes through the document with no stake in closing. No physician would accept a patient signing a consent form unread because a scheduler was in a hurry; the signature deadline on an employment agreement deserves exactly as much respect, which is to say: it moves when asked. Employers extend signing deadlines routinely for candidates who say they are completing legal review — the request itself signals a careful colleague, not a difficult one. The parallel holds one more lesson: consent is specific to the procedure actually planned. A consent form for the wrong procedure is worthless, and so is diligence aimed at the wrong clauses — which is why this module spends its attention on the six clause families that carry the largest dollar consequences rather than on the PTO table.

Six clauses to find — and read carefully

Tap each. These are the clauses that change physician lives most often.

Non-compete enforceability

Zero federal restrictions on physician non-competes are in force in 2026 — the FTC's 2024 rule was vacated in court, the agency dropped its appeals in September 2025, and the rule was formally removed from the Code of Federal Regulations on February 12, 2026

For two years, physicians heard that Washington had solved the non-compete problem. The actual sequence ran the other way: the FTC finalized a near-total ban in April 2024, a federal court in Texas vacated it before it ever took effect, the Commission voted in September 2025 to abandon its appeals, and in February 2026 the rule was deleted from the books. What replaced the federal rule is a fast-moving patchwork of state statutes — and for physicians, the patchwork is genuinely favorable and getting more so. Six states put new physician-specific limits into effect in 2025 alone. Louisiana's law took effect January 1, 2025, with separate rules for primary care and other physicians. Pennsylvania began voiding health-care non-competes longer than one year the same day. Indiana voided new non-competes between physicians and hospital systems starting July 1, 2025. Wyoming's general non-compete ban took effect July 1, 2025, and Arkansas banned physician non-competes outright on August 5, 2025. Texas Senate Bill 1318, effective September 1, 2025, caps physician non-competes at one year and a five-mile radius, caps the buyout at one year's total salary and wages, and voids the clause entirely if the physician is terminated without good cause. Those states joined a longer-standing group — California, North Dakota, Oklahoma, Delaware, Massachusetts, Rhode Island, New Hampshire — that had already banned or voided most physician non-competes, plus Minnesota's 2023 ban covering nearly all employees. The practical consequence: the 25-mile, 2-year clause in an offer letter may be fully enforceable, partially void, or a dead letter depending entirely on the state named in the choice-of-law provision and the year the statute last changed. The clause text alone tells you nothing. The current-year statute does. Two caveats keep the good news honest. Most of the new statutes reach only agreements entered into or renewed after their effective dates, so a clause signed in 2024 can remain fully binding in a state that banned new ones in 2025. And choice-of-law provisions can name a different state's law entirely — whether that designation holds varies by jurisdiction, which is exactly the kind of question a one-hour attorney consult answers definitively.

Source: Federal Register (Feb. 12, 2026); Federal Trade Commission

Cure period

A contractually defined window — commonly 10 to 30 days after written notice — in which a party may fix an alleged breach before the other side is permitted to terminate for cause.

Every termination article has four moving parts, and they interact. First, the term: one year, two years, three years — the number on the cover of the deal. Second, for-cause termination: a list of events that let the employer end the contract immediately or on short notice. Some triggers are objective and fair — license revocation, exclusion from Medicare, loss of hospital privileges, felony conviction. Others are subjective: 'failure to perform duties to Employer's satisfaction,' 'conduct detrimental to Employer's reputation.' A subjective trigger with no cure period is a trapdoor — one administrator's opinion becomes an immediate firing, and for-cause exits frequently forfeit unpaid bonuses, unvested signing-bonus forgiveness, and employer-paid tail. Third, without-cause termination: either party may end the agreement for any lawful reason, or none, on a stated notice period. This is the clause that quietly rewrites the term. A three-year contract with a 90-day without-cause provision guarantees exactly 90 days of income — the term is an outer boundary, not a promise. Fourth, cure rights. A notice-and-cure provision requires the employer to describe the alleged breach in writing and give a window to fix it before termination becomes effective. The AMA's model employment agreements show how short employers draft this window when left alone — as little as 10 days — and the length, like everything else in the article, is negotiable. The physician-protective pattern is specific: for-cause definitions limited to objective events, a cure period of at least 30 days for anything fixable, and without-cause notice periods that match in both directions. When the employer keeps 60 days and asks the physician for 180, the asymmetry is the message. Two adjacent terms complete the picture. Some contracts pay severance — continued salary beyond the notice period — after an employer-initiated without-cause termination; most pay nothing beyond the notice itself, which makes the notice length the entire cushion. And the physician's own resignation notice cuts symmetrically: a 180-day resignation requirement delays every future start date, and a candidate who must give six months' notice is measurably harder for the next employer to schedule.

Why it matters: The without-cause notice period is the real income guarantee, and it is the number that rationally sizes a lease, a home purchase timeline, and an emergency fund. The cure period is the difference between a documented warning and a same-day badge deactivation. Both are two sentences long, and both are read after signing far more often than before.

The trapdoor test

Tail coverage negotiation

Claims-made vs. occurrence, at a glance

The malpractice paragraph is one sentence long and decides a five-figure exit cost. American College of Physicians career guidance prices the tail at as much as 1.5 to 2 times the annual premium — a single payment, due at departure, in the same month income stops. Which policy type the employer carries determines whether that bill can ever exist. The table below is the whole decision, compressed. One nuance the table compresses: 'nose' coverage — prior-acts coverage purchased through the next employer's carrier — can substitute for a tail, but it is never automatic. It must be underwritten and confirmed in writing before the switch, or the earlier years of practice go uninsured.

The signing bonus that is secretly a loan

The 2025 AMN Healthcare review of physician recruiting incentives put the average signing bonus at $38,315 and the average relocation allowance at $12,619 — and nearly all of that money arrives with a repayment clause attached. The standard structure: leave, or be terminated for cause, before a commitment period ends — commonly two or three years — and some or all of the money comes back. The two designs behave very differently. Prorated forgiveness retires the obligation monthly: leave a $36,000 bonus at month 24 of 36 and the exposure is $12,000. Cliff forgiveness retires nothing until the anniversary: leave the same bonus at month 35 and the contract can demand all $36,000. The trap most physicians discover only at departure is that repayment is almost always drafted in gross dollars while the money was received in net dollars. A $38,315 bonus loses roughly a third to withholding on arrival — 22 percent federal supplemental withholding plus 7.65 percent FICA plus state tax — so about $26,000 hits the bank account. A clawback letter then demands the full $38,315. The tax already paid is generally recoverable in a later filing year through a claim-of-right deduction or credit, but the paperwork, the timing gap, and the cash-flow strain all sit with the physician, in the exact month the paychecks stop. Relocation allowances and student-loan stipends usually carry their own parallel clawbacks, so the departure invoice stacks: bonus plus relocation plus stipend plus, if the contract was silent, a five-figure tail premium. The stacking also interacts with the termination article: a for-cause exit accelerates every clawback at once, which is one more reason the breadth of the for-cause definition — covered earlier in this module — is a dollar-denominated term rather than legal fine print.

How to avoid it: Read the repayment sentence for three things before signing: the trigger, the schedule, and the survival. The trigger determines whether repayment applies when the employer initiates a without-cause termination — as drafted, 'termination for any reason' includes being let go, and the protective carve-out voids repayment when the departure is the employer's choice, or follows death or disability. The schedule determines proration — monthly forgiveness is a routine, low-resistance redline. The survival check covers interest and stacking: confirm no interest accrues and list every repayable dollar in one place so the total exposure is a known number, not a surprise.

Compensation models

Tap each. Knowing which model you are signing into changes how you think about everything else.

The year-three cliff: pricing the guarantee's expiration

A Family Medicine attending signs at $240,000 guaranteed for two years, converting in year three to pure production at $52 per wRVU. By month 30 her growing panel supports 4,100 wRVUs per year.

Bottom line: A $240,000 guarantee at a $52 conversion factor implicitly assumes 4,615 wRVUs by the first day of year three. A physician still ramping at 4,100 wRVUs takes a $26,800 pay cut the month the guarantee expires. Divide the guarantee by the conversion factor before signing, and ask what the last physician in the seat actually produced.

Call obligation

The contract terms defining how often a physician must be available outside scheduled clinical time, on what notice, at which sites, and for what additional pay, if any.

Call is a compensation term denominated in nights and weekends, and it hides in more places than any other obligation. The architecture has five parts. Frequency: a stated ratio — one-in-five, one-in-seven — or, in the drafts that cause trouble, no number at all ('as assigned,' 'shared equitably among the medical staff'). Scope: home call versus in-house, and whether availability is restricted (must respond within a stated time) or unrestricted. Sites: call at the primary hospital only, or at every campus the system operates — a distinction that matters enormously in multi-site systems. Compensation: call bundled into base salary, paid per diem, or paid per encounter; every structure is common, and the contract decides which one applies to nights the physician will work either way. Location in the document: the contract body, or a medical staff policy incorporated by reference — and a policy the employer can rewrite is a number the employer can change. The questions that surface the real obligation are concrete. What is the denominator today — how many physicians actually share this call schedule — and what happens to the ratio when one of them resigns? One-in-six is a schedule; 'equitably shared' is a formula whose variables the employer controls. Is there a cap, in writing, in the contract body? Is call beyond the stated frequency compensated, and at what rate? Do weekend and holiday assignments distribute evenly, and does outreach-site coverage count against the ratio? None of these questions is hostile; all of them are answerable in one email — and an employer that will not put the answers in writing has answered a different question. Call also has a paper trail worth requesting: the actual schedule from the past three months, which shows the real ratio, the weekend distribution, and how often the flexible language fired. Employers share it readily when the answer is flattering — and hesitation, when it comes, is data too.

Why it matters: Uncompensated or uncapped call is an invisible pay cut: the effective hourly rate of the position falls with every added night while the printed salary stays untouched. It is also, per the evidence in the next lesson, a schedule-control problem — and schedule control is what the burnout literature keeps finding at the center of physician attrition.

45.2% of U.S. physicians reported at least one symptom of burnout in 2023 — down from 62.8% in 2021, but still far above the general working population

A contract module talks about burnout for a concrete reason: the clauses that set schedule control are the ones the burnout evidence keeps pointing at. A 2025 multi-institution study in Annals of Internal Medicine surveyed more than 1,500 physicians and found that poor control over clinical schedule, patient volume, and workload were each independently associated with burnout, and that poor control over volume and workload was associated with intent to reduce clinical effort or leave the organization. The costs are not abstract. Han and colleagues estimated in Annals of Internal Medicine that burnout-attributable turnover and reduced clinical hours cost the U.S. roughly $4.6 billion per year — about $7,600 per employed physician per year at the organizational level. Clinicians increasingly name the underlying experience moral injury rather than burnout: being structurally prevented from doing right by patients. A schedule imposed by a policy document the employer can rewrite is one of those structures. Now map the evidence onto the contract. Call frequency written as a number with a cap, clinic sessions per week stated in the contract body, protected time actually protected, and compensation-plan changes requiring mutual written consent — these are the terms that determine whether the physician controls the schedule or the schedule controls the physician. A contract that is silent on them has not left the question open; it has answered it in the employer's favor. The financial clauses in this module decide what a job pays. The schedule clauses decide whether the physician is still in the job — and still in medicine — when the guarantee expires, the bonus vests, and the non-compete finally lapses. Career longevity is the largest financial asset a physician owns, and it is negotiated in the same document as the salary.

Source: Shanafelt et al., Mayo Clinic Proceedings (2024)

The review checklist

• Have a healthcare-specific employment attorney review every contract before signing. Cost: $500-1,500. Value: enormous.
• Tail coverage is one of the most negotiable items in any contract. Always ask.
• Non-compete enforceability is state-specific. Do not assume the radius is binding without state-specific legal review.
• The compensation model determines what every other clause means. Read it first.

Do this next: Before signing, list the six clause types above and write down what your contract says about each one. Bring that list to an employment attorney. A contract-analysis tool can also flag those clauses and pull every compensation term — the model, the conversion factor, the threshold, the guarantee and its expiration — into one place.