Guide · Healthcare · Physician Employment

Physician Employment Agreement Red Flags Before You Sign

A physician employment contract is a decade of your professional life compressed into fifteen pages, and the terms that will matter most are the ones you are least likely to read closely. The time to negotiate them is before you sign, because after that they are simply the rules.

By Lincoln Square Law · 10-minute read

Physicians are trained to read a chart with care and a contract with hope. The employment agreement arrives near the end of a long recruitment, everyone is ready to move forward, and the document looks standard. But “standard” favors the party that wrote it, and the clauses that decide how much you earn, whether you can leave, and where you can work next are rarely the ones a first read lingers on. None of the flags below means walk away. Each means slow down, understand it, and negotiate it while you still have the leverage a signature represents.

Compensation: read past the base number

The salary figure is the easy part. The structure around it is where the surprises hide. If your pay includes a productivity component, understand exactly how it is measured, the units, the conversion factor, the thresholds, and whether the formula can be changed by the employer during the term. Look for how a guaranteed or draw period works and whether you could owe money back if productivity lags. Confirm what counts toward your compensation and what does not, and get any bonus or incentive criteria in objective, written terms rather than “at the discretion of the group.” A compensation clause you cannot model on paper is a compensation clause you do not actually understand.

The restrictive covenant: your next job in disguise

2026 Illinois threshold check: under the Illinois Freedom to Work Act, an employee noncompete is prohibited unless annualized earnings exceed $75,000, and an employee nonsolicitation covenant is prohibited unless annualized earnings exceed $45,000, subject to the Act’s definitions, exclusions, notice, consideration, and enforceability requirements. Those dollar thresholds increase again on January 1, 2027.

The non-compete is the clause most likely to shape your life years from now, and it is routinely skimmed because it describes a future no one signing wants to imagine. Read it as if you will leave, because someday you will. What geography does it cover, for how long, and for what scope of practice? A covenant that bars you from practicing your specialty within a wide radius for two years can force you to move your family or leave medicine in the area entirely. Illinois courts will enforce reasonable restrictive covenants but scrutinize them, and reasonableness turns on the specific scope, duration, and geography measured against a legitimate business interest, so an overbroad covenant is both a personal risk and a legal question worth real attention. Negotiate the radius, the term, and a clear definition of the restricted activity now, and watch for related non-solicitation language that can be just as limiting.

Termination: how the relationship actually ends

Every employment agreement ends, and the termination provisions decide on what terms. Distinguish termination for cause from termination without cause, and read the “without cause” clause closely, because it usually lets either party end the relationship on a set notice period, which means the security implied by a multi-year term can be undone with ninety days’ notice. Understand what triggers a “for cause” termination and whether you get an opportunity to cure. Pay attention to what happens to your compensation, your benefits, and especially your restrictive covenant when the agreement ends, because a non-compete that survives a without-cause termination by the employer can feel deeply unfair and is worth negotiating against.

Malpractice insurance and the tail

Professional-liability coverage is a clause with a large number hidden inside it. Determine whether the employer provides claims-made or occurrence coverage, because the distinction controls what happens when you leave. Claims-made policies cover claims only while the policy is active, which means claims brought after you depart for care you provided during employment may not be covered unless someone buys “tail” coverage. Tail coverage can be expensive, and the agreement should say plainly who pays for it and under what circumstances. A contract silent on the tail can leave a departing physician with a five-figure bill or an uninsured gap for past care. Resolve it before you sign, not on your way out.

Call, schedule, and the life the contract describes

The obligations that govern your daily life are often stated vaguely, and vagueness favors the employer. How is call coverage allocated, and is there any limit on it? What are your clinical duties, your schedule, your location or locations, and can the employer change them unilaterally? A clause that lets the group assign you to any site or adjust your responsibilities “as needed” gives away more than most physicians realize. You do not need to script every day, but you should understand the outer boundaries of what you are agreeing to do, and negotiate limits where the language is open-ended.

Assignment, group changes, and who you actually work for

Medical practices are bought, merged, and restructured, and your contract should account for the possibility that the entity you signed with is not the entity you end up working for. Look at whether the agreement can be assigned to a successor without your consent, and what that means for your compensation, your covenant, and your role if the group is acquired. This matters especially in the current market, where independent practices are frequently absorbed into larger organizations and management-services arrangements. The person across the table today may not be the person enforcing this contract in three years.

The clauses worth the hardest negotiation

You will not win every point, so spend your leverage where it counts. For most physicians the restrictive covenant, the termination terms, and the malpractice tail deserve the most attention, because they govern your ability to leave, the security of your position, and your exposure for past care, the three things a contract can most damage. Compensation structure and call obligations come next. The recruitment feels finished by the time the contract arrives, but the signature is precisely the moment your leverage is highest, and it never returns to that level again.

Use counsel before signing, not after leaving

The pattern we see most often is a physician who signed a contract on trust and calls years later, on the way out, asking whether the non-compete is really enforceable or who owes the malpractice tail. By then the leverage is gone and the options are narrow. A contract review before signing costs a fraction of what an avoidable dispute costs later, and it is the moment when every term is still negotiable. The best time to understand your employment agreement is while the employer still wants your signature.

How we review a physician contract

We read these agreements against the moments that will test them, the day you want to leave, the day the group is acquired, the day a claim arrives after you have moved on, and mark the terms that will matter then, not just the ones that read cleanly now. The goal is not to turn a fair offer into a fight. It is to make sure you understand what you are agreeing to and to negotiate the handful of clauses that carry real consequence while they are still open. A contract reviewed carefully before signing is a decade of your career protected, and one signed on trust is a decade governed by someone else’s drafting.

Benefits, time off, and the fine print that adds up

Compensation is more than salary, and the benefits terms deserve a real read because they quietly shape both your income and your life. Confirm how paid time off, sick leave, and CME time and allowance actually work: how much, whether it carries over, and whether you have any real ability to use it given your clinical schedule. Look at whether the employer covers licensing, DEA registration, board certification, and professional dues, which add up quickly. Understand the retirement plan, its match, and its vesting, because a match you forfeit by leaving before vesting is part of the true cost of the covenant that governs your exit. These terms rarely make or break a decision on their own, but read together they can shift the real value of an offer by more than a headline salary difference.

Signing bonuses, loan repayment, and the clawback

Recruitment incentives come with strings, and the strings are the part to read. A signing bonus, relocation payment, or student-loan repayment benefit is frequently subject to a clawback, an obligation to repay some or all of it if you leave before a defined period, sometimes on a schedule that forgives the debt over several years and sometimes all at once. Know exactly how much is at risk, for how long, and whether the obligation is triggered only if you leave voluntarily or also if the employer terminates you without cause, which would be a harsh result worth negotiating against. These provisions can turn a departure you are otherwise entitled to make into an expensive one, and they interact with the restrictive covenant and termination terms to define how genuinely free you are to move. Model the numbers before you sign, not when you are deciding whether to leave.

Get every promise in writing

Recruitment is full of assurances, about call, about a path to partnership, about how the productivity formula “really works in practice,” about flexibility that is not in the draft. Verbal promises do not survive a change in management, and most agreements contain an integration clause stating that the written contract is the entire deal and supersedes anything said along the way. If a commitment matters to your decision, it belongs in the document. Ask for it plainly, and treat reluctance to put a promised term in writing as information about how reliable the promise is. The contract is what you can enforce, and the conversation is not.