Some Results of Mediation in Health Care Employment Disputes

In a previous article we discussed the value of mediation in resolving health care employment disputes. In this one, I describe some of the important concessions that may be obtained for physician employees in a mediation.

Restrictive Covenants. Almost all physician employment contracts contain a covenant that limits a physician’s right to practice in the employer’s service area for a period of time after employment ends. Usually the contract provides that the physician agrees that the covenant is reasonable and that a breach would harm the employer. These covenants frequently grant the employer the uncontested power to obtain an injunction. Sometimes it provides for huge liquidated damages.

In mediation Employers will rarely agree to eliminate a restrictive covenant. However, they may agree to modify the covenant limiting its duration and/or the geographic scope.

Reasons for Termination. Termination for cause is a serious blow to a physician. In addition to the emotional impact she may have difficulty finding future employment. Bad references or practice gaps send a powerful negative signal to future employers. Under certain circumstances an Employer may agree that termination was by mutual agreement, rather than for cause. Although not a perfect outcome, this concession removes a significant obstacle to future employment.

Repayments. Many physician employment contracts provide for signing bonuses and other financial benefits that are dependent on the physician completing a certain period of employment. If the Employer terminates a physician before the end of that term the Employer may require the physician to forfeit the bonus and benefits due, or demand a refund if they have already been paid. Again, under certain circumstances it may be possible to waive forfeit and/or repayment of a bonus or other payments subject to forfeit or repayment.

Non Disparagement. Often both the Employer and physician have significant grievances against each other that if expressed could be extremely damaging. In order to limit publication of these grievances in references or other contacts with third parties, the Employer may agree to provide neutral references and/or not cite any harmful facts or opinions about the physician. As a concession the physician may agree to cooperate with the Employer in defending certain types of litigation claims.

These important concessions demonstrate the value of mediation in resolving employment disputes between Employers and physicians. Mediation also reduces the time and cost involved in resolving disputes; and I believe favorable outcomes are more predictable than in litigation.