During your final year of medical training, you might be daydreaming a bit about life beyond residency and fellowship. You’re looking forward to getting to work, making some money and start living! You have credit card debt, student loan debt, car payments, and perhaps some loans from family members to pay back. And with any luck, in addition to starting a new job that pays well, you hope to line up some moonlighting on the side. Sure, it might mean some long hours, but you’re already accustomed to that from your residency.
But – not so fast! Your new employer expects you to devote essentially all of your professional efforts to growing and promoting your practice. And a close look at your employment agreement indicates that there are several potential barriers to working outside your normal full-time work environment.
The first issue has to do with your restrictive covenant, an issue that I touched on in my previous blog (Restrictive Covenants), which prevents you from competing with your employer. You will also need to see what restrictions have been placed on moonlighting. Do you need your employer’s permission? Are there restrictions as to the type of work you can do? Is there language about the type of work you specifically can’t do?
So, let’s step back and think about how to prevent these constraints by negotiating a contract that appropriately addresses the moonlighting issue.
The new employer has invested heavily in your recruitment, possibly paying a significant sign-on bonus, and will be providing salary, facilities, supplies, equipment and staffing to get you on your way to a healthy practice. You will be a full-time employee, making a good salary, and you need to be well rested and focused when you are in the office or at the hospital seeing patients and building the practice. During your off hours you should be relaxing, keeping up with medical journals and specialty society publications, studying for your boards and helping to get your name out there by volunteering in the community. According to your new employer, you should not be involved with working in a local urgent care clinic, or doing emergency room shifts or hospitalist work that might help a competitor or reduce your focus on this new position.
You agreed to put forth your best efforts to build a healthy practice working 40 to 50 hours a week (which includes office time and possibly hospital rounds) and cover one weekend a month of telephone and hospital call. You will NOT be involved in working for the employer the other weekends, nor at night-time after the clinic closes if you’re not on call. As long as you’re rested and prepared to provide quality care, address your patients’ needs and document your care appropriately, you don’t believe your new employer should concern itself with your activities during the rest of your downtime. And you will be much more relaxed if you can pay down some bills and save money for upcoming expenses, like purchasing a new home.
Both sides of this argument have valid components. The secret is to avoid potential conflict with your new employer by first discussing your expectations and theirs, and then creating an employment agreement that creates clarity regarding the boundaries pertaining to work outside your full-time employment.
When I first started as the third physician in a small family practice, I was clearly interested in growing the practice. Since I was building a new practice with my associates, it started out slow, in spite of advertising and “meet and greets” with local specialists. So, I was not overworked and I had plenty of energy to do some additional work that could help me pay off some debts.
I was doing my part to get my name out there and grow the practice. I was very accommodating and friendly to my patients. I spent extra time educating them and did follow-up calls personally to check on them.
I went beyond that by attending almost every hospital medical department meeting for my first few years (I think the surgeons, obstetricians, internists, pediatricians and emergency medicine physicians were a little surprised and annoyed by my sitting in on their department meetings). But it gave me a chance to meet many of the local physicians and to bolster my education in each of those areas, being a newly trained family physician practicing obstetrics. I accepted extra emergency room back up call and any new patients sent my way. And I volunteered to accept new indigent newborns into my practice that were born at our two hospitals, where family physicians were not required to do so.
With my partners’ permission, I also began working at the local STD clinic, the family planning clinic and the hospital based occupational medicine clinic, and I rotated weekly shifts at the local private university student health service with my associates. Some of the compensation for these services flowed to the practice and some flowed directly to me. But all of them basically gave me exposure to the community while not competing directly with our own practice, since the patient populations being served were different.
So, how should you approach this aspect of your proposed offer of employment? Start by acknowledging that the employer is going to want some assurance that the majority of your efforts will be devoted to its interests. Next, consider whether there are moonlighting opportunities that would actually benefit the employer (rather than threaten it). Finally, identify opportunities that might not benefit, but also won’t harm, the employer. Finally, plan for unforeseen opportunities for which the door should be left open, either explicitly, or through opportunity for discussion and negotiation in the future.
To stimulate your thinking in this area, here is a list of potentially compensable activities that might be available:
- writing and authorship – either medical or non-medical
- manuscript editing
- acting as a surveyor (e.g., CME accreditation, hospital accreditation, lab or surgi-center accreditation, etc.)
- other non-clinical activities (family business, software design, etc.)
- local health department, STD, family planning or indigent care clinics
- medical directorships – nursing homes, assisted living, mental health facilities, hospice organizations
- shift work at other day clinics, urgent care, emergency departments
- occupational medicine – respiratory screening, Federal Department of Transportation (DOT) physicals, pre-employment physicals
- team physician at sporting events
- annual school physicals (potentially on site)
- college student health center
- other community service
- serving as expert witness
- lecturing patients, clients, students, residents
- teaching/supervising med students, residents, NP students, PA students
Some agreements address this issue by simply requiring the new physician to obtain explicit permission from the employer before engaging in any clinical moonlighting activity. Language to this effect might look like the following:
“Physician agrees that he or she shall not provide professional medical services for any other entity during the term of this Agreement, without prior written approval of Employer.”
This is straightforward, avoiding extensive negotiation now, but with the potential consequence that this issue might become quite contentious at a later time.
It is possible to include much more specificity, however, particularly if you have certain interests or expertise that you wish to utilize:
“Employee may retain for his or her personal benefit, compensation resulting from: teaching, research, published writings, and clinical activities that do not directly compete with Employer, so long as they: are carried out during vacation time or non-working time, do not interfere with Physician’s duties under this agreement, do not require the use of Employer’s resources (including liability insurance coverage) and, have been discussed with Employer in advance.
Additional language will sometimes be needed to:
- clarify relationships with, or investment in, potentially competing entities,
- describe the nature of damages that might occur if this provision is breached,
- require that the Employee withdraw from such activities if the Employer deems them to be interfering with the performance of his or her duties, etc.
This area can become quite complex, depending on the nature of the moonlighting that may be pursued, and should be thoroughly reviewed and discussed with your own attorney before agreeing to final language in the agreement.
Ultimately, most employers will agree that it is appropriate for you to seek limited outside work activities to enhance your income, as long as they do not interfere with your ability to meet your responsibilities under your contract, compete with it for patients, and utilize its resources. If such an outside activity is at least partially clinical in nature and likely to be of a long-term duration, it might be wise to consider how it might become part of your employer’s agreement.
For example, my hospital system purchased a practice and employed a physician that was spending a small amount of time as a nursing home medical director. The issue became mildly contentious during contract negotiations, so we decided to “carve out” these activities and allow the physician to provide services during non-work time and receive compensation directly from the nursing home for the administrative duties. Later, it became clear that it was difficult to fully separate those duties, that there was occasional need for back up by some of the other group physicians, and that liability insurance for these activities was difficult to maintain. Ultimately, we all agreed that the medical directorship should be provided by the hospital-based medical group, with this employee providing services, allowing for back-up and for liability coverage. The compensation came to the organization, but flowed through to the physician, with a small amount held back by the employer to cover administrative expenses associated with the relationship.
Feel free to contact me or respond to this post if you have any thoughts or questions about this aspect of your pending agreement. I am happy to review any proposed agreement you might be considering and provide my feedback free of charge.