Introduction concerning the types of matters I handle
As a matter of both ethics and competency, a fair amount of what any lawyer does is to identify matters that are within one’s area of expertise or beyond it. In this regard, if you are a licensed healthcare practitioner employee or independent contractor (“IC”) and you are facing employment law or independent contractor issues or have questions about employment or IC contracts, those issues are squarely in my area of practice.
A caveat here, however, is that I am an employment law attorney and not a healthcare attorney per se. As an employment law attorney who often counsels and represents healthcare professionals, I am conversant with the many legal issues that arise in a healthcare setting, whether they relate to HIPAA, the Stark Act and Anti-Kickback Laws, the FMLA, medical staff bylaws, hospital privileges, credentialing, Medicare billing, qui tam cases, the National Practitioners Data Bank, state medical professional licensing, and medical malpractice issues. My perspective on these issues, however, is that of an employment attorney. This perspective differs from that of a healthcare attorney. A well-rounded healthcare attorney knows the above issues inside and out, whereas an employment lawyer’s working knowledge necessary to provide employment law advice is more akin to the view from 10,000 feet (or in my case perhaps 3,000 feet or so). Thus, while I cannot promise I will be the right attorney for your circumstances, I will be sure to know the sort of attorney who can answer your questions.
Note that I also stay in my lane when it comes to business law. Valuing a business for buy-in purposes, or providing legal advice concerning taxation or securities law, are beyond my area of expertise. Where I can, I provide referrals regarding such issues.
Legal advice for a wide variety of licensed medical professionals
With these caveats aside, note that employment or Independent Contractor agreements for non-physician medical professionals are often similar to physician’s employment contracts. For example, if you review the physician employment agreement articles on this website for your state/jurisdiction, many if not most of the considerations addressed there will be applicable to the terms and conditions of your own contract.
If you are an RN, you may be covered by a Collective Bargaining Agreement (CBA), and, thus, many of the contractual provisions important to you will be standardized across your bargaining unit. Even with unionized employees, however, there are non-waivable statutory protections such as Title VII and comparable state laws protecting your civil rights as an employee to be free from workplace discrimination and harassment (note Independent Contractors are generally not covered by these statutes, although ICs are protected from harassment under the California Fair Employment and Housing Act).
In addition, most employers are also subject to the Fair Labor Standards Act (“FLSA”), and employers of a certain size are subject to the Family Medical Leave Act (FMLA) (applicable to employers with at least 50 employees) and the Americans with Disabilities Act (ADA) (applicable to employers with at least 15 employees), along with their comparable state-law counterparts. For most purposes, the statutory protections of the FMLA and ADA establish minimum standards in the areas of law they cover; a CBA, however, might establish a higher standard that is more protective of an employee. See, e.g., 29 CFR 541.4. (“The Fair Labor Standards Act provides minimum standards that may be exceeded, but cannot be waived or reduced. . . . While collective bargaining agreements cannot waive or reduce the Act’s protections, nothing in the Act or the regulations in this part relieves employers from their contractual obligations under collective bargaining agreements.”).
Compensation issues in healthcare professional employment contracts
Contractual issues encountered by healthcare professionals run the gamut from simple to complex. Disagreements surrounding compensation are not uncommon, particularly if the contract does not spell out in detail the compensation to be provided. If you are not paid a guaranteed salary, there is the possibility for misunderstanding if the expectations of employee and employer do not align.
A related issue may occur at the intersection of compensation and scheduling. Many contracts will state that the healthcare professional employee shall be “available” for X shifts per month or hours per week. Some readers may interpret this to mean that X amount of work is guaranteed. Maybe. Maybe not. Unless the contract provides that the employee will be paid for X shifts/hours, then the employee’s compensation may be susceptible to the ebb and flow of the employer’s business. Ambiguity in contract language relating to a lack of guaranteed shifts has certainly been known to result in problems for the employee. On the other hand, with the so-called exodus from healthcare during the early 2020s, there may be plenty of shifts to go around for healthcare practitioners who are eager to work.
Employee versus independent contractor
Another issue relating to scheduling may arise when it comes to determining employee versus independent contractor status. For example, a contract may be entitled, “Independent Contractor Agreement,” only to repeatedly refer to “employment” and incorporate provisions such as a “full-time” schedule and a noncompetition covenant. All of these suggest an employment relationship rather than a contractor relationship.
A theoretical example of how not to handle an independent contractor relationship occurs when a healthcare practitioner provides ‘independent contractor’ services to an entity that provides office facilities, reception and billing, reserves complete control over patient records, and purports to impose a noncompete agreement on the contractor that precludes work elsewhere during the relationship and for a period following termination. Under any test, that looks more like an employment relationship than an independent contractor relationship.
Various governmental agencies utilize different tests to determine IC status, including the IRS and state agencies with jurisdiction over revenue, unemployment insurance, workers’ compensation, and civil rights and wage and hour laws. One important component of all these tests is determining who retains the right to control how the work is done. This is not always entirely clear in context, and the law continues to develop in this area, in part based on the explosion of gig work throughout the country.
California, for example, has recently passed AB5, which provides specific guidance on the issue in the form of a 3-step ABC test for those occupations not exempted; for those exempted, California law still utilizes the 11-step Borello test in many contexts. For better or worse, many California healthcare professionals who are not physicians (physicians are exempted from AB5) must meet the ABC test in order to be properly characterized as independent contractors; and the ABC test will make it difficult for these individuals to be anything but employees. If the foregoing is not complicated enough, note that the IRS utilizes a 20-step test that you should also be aware of if you are considering IC status.
Speaking very generally, an employer may have tight control over how an employee performs a job, whereas a business or individual working with an independent contractor generally controls only the end result of the work. For example, when utilizing the services of an independent contractor plumber, a homeowner with a leaky faucet retains a plumber and pays for the end product of a repaired faucet. The homeowner does not control the clothing the plumber wears nor provide the tools the plumber uses to get the job done, and the homeowner typically does not tell the plumber when to arrive. In any event, regardless of employee or IC status, most healthcare employment contracts specify that the practitioner remains in control 0f the care provided to patients, subject to professional, industry and ethical standards.
Should you have questions about employee versus independent contractor analysis, you should obtain advice from an experienced employment attorney.
Contracts for employed healthcare professionals in Oregon, Washington, California, and Montana may contain restrictive covenants addressing issues of confidentiality and trade secrets, the assignment of inventions, and may also impose nonsolicitation and noncompetition restrictions. Confidentiality and trade secret provisions are relatively non-controversial matters, which generally confirm obligations you would have in any event pursuant to HIPAA, your employer’s policies, and various versions of the Uniform Trade Secrets Act adopted in your jurisdiction.
Nonsolicitation and noncompete restrictions are another matter entirely. A detailed discussion of this complex area of employment law is well beyond the scope of this introductory article. And note that the law governing restrictive covenants does vary from Montana to Washington to Oregon and California, the jurisdictions in which I am licensed to practice. But suffice it to say, for present purposes, that these covenants can operate as post-employment handcuffs (and not of the golden variety), effectively prohibiting you from practicing your profession in potentially broad geographic locations for up to a year after your employment terminates (see Oregon – as 0f 2022), 18 months (see Washington), or perhaps two years (see Montana). In California, noncompetition agreements are generally void and not enforceable. Cal. Bus. & Prof. Code 16600.
In Washington, if you are an independent contractor medical professional, you can be subject to a noncompete provision only if your earnings from the party seeking enforcement of the noncompetition covenant exceed $250,000 per year. RCW 49.62.030.
Nonsolicitation provisions are also governed by legal standards that vary from state to state. Whether you have a Montana dentist employment contract, a Washington acupuncturist employment contract, an Oregon strength coach employment contract, or a California licensed social worker agreement, you should consult with an employment attorney licensed to practice in your state to discuss any questions you may have concerning restrictive covenants before you sign your contract.
Given the prevalence of arbitration provisions these days, it is important to note that your healthcare practitioner employment contract may well include an arbitration provision. Courts have enforced arbitration provisions in many circumstances, with only the more extreme examples of procedural or substantive unconscionability rendering an arbitration clause unenforceable. The Federal Arbitration Act (“FAA”), which favors arbitration, will govern most of these arbitration provisions. While individual states have statues also purporting to govern arbitration agreements, the FAA preempts most state laws on arbitration.
Black letter provisions
As with all formal contracts, your healthcare professional employment agreement is likely to include a number of “boilerplate” provisions, such as an integration clause, a severability clause and an assignment clause, along with choice of law, forum selection, and attorney’s fees provisions. Discussion of these provisions is beyond the scope of this article, but note in particular the “integration clause” provision. This contractual term will state that the contract supersedes all prior oral discussions or writings. This means that all issues of importance should be addressed in the contract. At a minimum, note that any ‘side promises’ that may have been made to you which would contradict an express, written contractual term, are very likely to be unenforceable should a dispute arise. In rare circumstances, the common law tort of fraud could provide a basis for a legal action based on promises made outside the confines of the contract which contradicted a contract term. But you do not want to engage in litigation if there is any reasonable way to avoid it. Due diligence up front, so you thoroughly understand your contract, is generally well worth the time and expense of consulting with a healthcare employment attorney.
This article is not legal advice. It is, of course, the briefest of discussions of some of the myriad contractual issues that can arise in connection with your employment as a healthcare professional. Whether you have a California veterinarian employment contract or a Washington dentist employment agreement, or if you are a mental health professional in Montana or a Certified Registered Nurse Anesthetist (“CRNA”) in Oregon, I would be happy to provide a consultation and legal advice concerning your employment agreement.