Getting to Know Your Corporate Optometry Employment Contract

Many job applicants and new employees are so excited to have a job that they fail to appreciate that they must review their employment contract before they formally agree to work for the employer. While some employees hire workers on an at-will basis (either the employee or employer can end the employment) at any time, written employment contracts are the more secure options.

As you review your optometry contract, you have to understand the state and local medical regulations that apply to the practice of optometry. The state or local medical boards or associations may have specific requirements. New grad optometrists, who don’t understand the day-to-day optometry practice issues, should especially, make speaking with an experienced employment attorney a priority.

Benefits and duties

The employment contract should set forth your compensation, medical obligations, continuing education requirements, and other criteria. Some of the issues that need to be discussed and placed into a written contract include:

Employee pay and benefits

The compensation. The amount of pay and the payment periods should be established. Pay can be based on an hourly rate, daily rate, or salary basis. Pay can also be based on performance measurements. Any performance criteria such as payment based on the number of patients seen in a month or should be set forth in the employment contract. Be very detailed and transparent regarding performance and production-based compensation as these types of incentivization structures can strain an employer/employee relationship if not properly explained, implemented, and regularly reviewed.

The contract should also address the exempt or non-exempt status of the employee as it relates to overtime compensation. This is not so cut and dry. Each state has their own salary requirements for classifying status properly. Don’t rely on Google alone to make these important decisions. Speak with your employment attorney.

Benefits. All employee benefits should be identified in the employment contract. Benefits include personal days, paid vacations, life insurance, 401 k benefits and other retirement benefits. Benefits also include insurance for your health, dental, and vision care. You may also be entitled to or be able to bargain for disability insurance.

The employment contract should clarify who pays for malpractice insurance.  

Medical malpractice insurance is complicated. Some policies only cover claims while you’re working for the optometry employer. Tail insurance also covers claims made after you leave or retire from the practice.

Additional items your lawyer will review include the payment of licensing fees and help towards repayment of any student loans.

Employee Classification

Misclassification of new employees as 1099/independent contractors is a major problem, and you don’t want to make this mistake from the outset.  Many employers want such an arrangement to simplify their lives, but they must be careful to ensure compliance with state and federal employment and tax laws. If the optometrist has a set schedule, doesn’t own or lease equipment, and if they don’t practice at other practices, they’re most likely employees.  If they’re renting, leasing and owning their own equipment within a location, then they may fall within the independent contractor classification. Ask your employment lawyer about this up front to avoid a lot of hassle and tax-related consequences later.

Employee duties

The contract should provide information in detail about:

The work schedule. This includes the hours and days including weekend schedules and any on-call requirements.

The specific requirements of your optometry practice. The requirements usually include diagnosing and treating patients. Optometrists need to understand when they need to seek medical consultations with or refer patients to ophthalmologists. Optometrists need to have the correct credentials and update their credentials. They may be required to complete continuing medical education courses.

Any regulatory requirements including compliance issues. For example, all employees need to understand the HIPAA (Health Insurance Portability and Accountability Act) requirements.

The employment contract may also address other obligations such as the administrative and record-keeping duties of the optometrist. The contract may also discuss the duties of the doctor to supervise the work of medical assistants and non-medical staff. Any telemedicine requirements should also be identified.

Termination clauses and requirements

An optometry employee should clearly state whether you can be fired without cause or whether the employer needs cause to fire you. Any causes should be set forth in the employment contract. Examples of causes for termination include losing your license or certification to practice.

Employment contracts should set forth the amount of time you need to provide the employer before you can leave your job. The employer needs to provide you time before any termination, too. A notice of a month or two is common – though some medical professions require much more time because of the time and investment in finding another optometrist.

The employment contract should also set forth the medical and legal requirements for notifying your patients that you are leaving the practice. Patients do have the right to be notified. Both the employer and the employee want to keep the patient as a client.

Optometry employment contracts may also have severance agreement provisions. These clauses provide that if you are terminated from your contract, you will receive additional pay (normally a multiple of your weekly salary) in return for agreeing not to file any claims against the employer.

Non-disclosure agreements

Employers often ask their employees to sign employment agreements where the employee agrees not to divulge trade secrets or other information that the employer owns. This can include customer lists, operating practices, and medical techniques. The penalties for disclosure should be set forth in the agreement.

Restrictive covenants

Employers like to include a clause that provides that if the optometrist leaves the employer’s practice, that the employer:

• Will not practice optometry within a specific distance from the employer’s location (such as 3 miles from any of the employer’s optometry locations).

• Will not practice within a specific time (such as one year or two years) from the date the employee leaves the practice.

Some states, like California, have laws that make restrictive covenants illegal. In other states, courts review restrictive covenants as strictly as possible.

Still, the best course of action is to have an experienced employment lawyer review the restrictive covenant agreement before signing a contract.

Dispute resolution

More and more employers include arbitration clauses in their contracts. This means that if there is a dispute about your rights or the employer’s rights about the terms of the employment contract (usually after you leave the company or are fired), that the dispute will be resolved through arbitration and not through the court system. Arbitration clauses generally favor the employer.

The interpretation of the contract when there is an ambiguity (the contract isn’t clear) is normally resolved in favor of the employee. The better alternative though is to have a skilled employment lawyer review the contract so that any ambiguities can be addressed before you sign the contract.

Employees should understand that the written employment contract is the controlling document. You generally can’t state that there was a different oral understanding as to any term in the contract. 

It is important to try to negotiate based on your personal experience, speaking with colleagues or mentors, and consulting with an employment lawyer as you enter this phase of your career. Employment-related disputes can be costly, both in legal fees and lost time. However, they are avoidable when you and your employer are completely transparent about your needs.