By Ansley Franco

“With the advent of larger companies merging and acquiring smaller practices, the need to have an employment agreement in place is more important than ever,” Medovation Clinical Research CEO Helen Combs said.

An employment contract is a legally binding agreement that goes beyond the basic terms of an offer letter to cover a wide range of employment conditions and expectations. Commonly included components are a detailed job description, compensation details, confidentiality clauses and dispute resolution.

Both employees and employers may be wary of employment contracts. Still, Wallace Blizzard, partner at Wiggins, Childs, Pantazis, Fisher & Goldfarb in Birmingham, said it allows for early conversations at the beginning of a professional relationship that creates certainty for everyone.

“Typically speaking, I think the temperament of most practices is just to provide an offer letter for everyone on the team who is not a provider,” Combs said. “We’re advocating that anyone who is in a position of management or leadership should have an employment contract.”

In comparison, an offer letter includes the position title, start date, salary, basic benefits and at-will employment. “The offer letter gets you the job, but the day after, you could be fired at will without a contract,” Blizzard said.

“We just want to call attention to make sure people understand that, independent of what that letter may spell out or promise, it’s not legally binding where it will protect the employee,” CEO of Urology Clinics of North Texas Jason Biddy said.

“Like a prenup agreement, employment contracts protect both parties and allow for predictability if things don’t work professionally in the long run,” Blizzard said. “Each employment contract is different, and the structure is dictated by the company and potential employees.

“It’s best addressed from the front end when everyone is in a good mood. If you agree to this process before the employee starts work, everybody is more willing to give and compromise, and it’s easier to create this sort of certainty rather than after the fact when people get mad and threaten litigation.”

Combs said “employees who are not providers, like office administrators and front office workers, are given access to confidential information, financials and legal insight within the practice. These are not just positions that are able to be terminated easily. If there is a termination, they need to be dealt with thoughtfully, and a contract typically allows for that.”

“A company and employee should both want a contract to protect their interests,” Biddy said. “Employers benefit from the set performance metrics, non-competes and confidentiality clauses, while employees have exit agreements spelled out ahead of time.”

“Just coming to work knowing what happens if it doesn’t work out is just a massive stress relief, and it also gives an employee that has one a little more currency,” Blizzard said.

When Biddy was on the job market himself, he would eliminate a company that did not feel an employee contract was appropriate.

Combs also had a contract in place at her previous company. “It was extremely helpful when I left my last role to be able to organize my exit both from an operational perspective and a company perspective. They could find someone to replace me, and it was clear.”