Key Considerations in Dental Associate Contracts

When it comes time to sign a Dental Associate Contract, although many associates may feel pressured to quickly sign their agreement, it’s important to fully understand the terms of the agreement and, if necessary, negotiate for more-favorable terms.


While it is often apparent that the terms of a Dental Associate Contract can have a major impact on an associate in the near term, many associates don’t realize the restrictive effects certain provisions can have when it comes time for the associate to move on to the next opportunity. For example, many Dental Associate Contracts place geographic and time restrictions on where an associate can practice following their termination of the agreement.


Accordingly, it’s important for dental associates to fully understand all terms and provisions of any Associate Dental Contract presented to them. Nonetheless, some of the key provisions to pay special attention to include the following:


I.   Independent Contractor v. Employee Provisions          


It’s important to verify if your Associate Dental Contract calls for you to be hired as an independent contractor or as an employee. Generally, whether one is considered an employee, as opposed to an independent contractor, turns on the amount of control the hiring party maintains over the associate. Whereas an employee’s actions are generally governed and directed by the hiring party, an independent contractor maintains greater autonomy in determining how they carry out their work.


Because an independent contractor classification turns on factors such as control, even if a contract uses the term “employee” or “independent contractor,” such language may not be determinative. Instead, it is important to analyze the contract (and any related documents, policies, rules, or procedures) as a whole, to determine the parties’ respective rights, authority, and control. The determination is significant however, as an associate’s classification as an employee versus an independent contractor can have a significant impact on what rights and benefits the associate is entitled to.


II.   Compensation Provisions


As with any employment contract, it is essential that the provisions governing compensation in an Associate Dental Contract are clear and unambiguous. This includes not only clearly specifying the structure in which an associate is to be compensated (i.e. salary versus commission), but also clearly stating when such compensation is due, how such compensation is calculated, and how such compensation will be paid out. This is especially true for contracts calling for a commission-based method of compensation; for example, numerous problems may arise where an Associate Dental Contract is ambiguous as to whether commissions are based on the number of patients served or based on the amount of fees collected. Issues may also arise where a commission-based provision is not clear as to when such commissions are to be paid out.


Ideally, an Associate Dental Contract will also include provisions that clearly address questions regarding bonuses, raises, and expenses.


III.   Schedule Provisions


Although employment contracts—and, especially,Associate Dental Contracts—are often silent in regards to an employee’s or contractor’s schedule, because an employee’s or contractor’s schedule is often the driving force behind a contractor or employee’s compensation, if possible,it is essential to include clear language in an Associate Dental Contract that lays out an associate’s schedule or the parameters governing it. Such language not only serves to help ensure an associate receives their anticipated compensation, but may also be used to help ensure an associate maintains a expected quality of life.


IV.   Benefits Provisions


Benefit provisions are often tied to whether an associate is considered an independent contractor or an employee. Generally, although independent contractors are not entitled to most benefits, employees often are. This may be true even if an Associate Dental Contract is silent as to what benefits are provided as many states mandate employers provide employees with minimum guarantees regarding paid leave, insurance, maternity rights, and other benefits. Accordingly, it’s important to understand what benefits are being offered in the Associate Dental Contract itself, as well as what rights or benefits may be available by way of applicable local law.  


V.   Non-Competes & Other Restrictive Covenants


Lastly, it is imperative that associates understand what restrictive covenants an Associate Dental Contract may place on them. Restrictive covenants are obligations placed on a party to a contract that may limit such parties’ rights. Although restrictive covenants may prohibit an associate from taking certain actions during the term of the agreement, many covenants survive the expiration of an employment agreement. For example, many Associate Dental Contracts contain covenants restricting an associate from obtaining employment within a certain distance or time following such associate’s departure from the employer. Likewise, many Associate Dental Contracts may contain non-solicitation provisions prohibiting an associate from contacting the employer’s customers if the associate changes practices or sets up their own shop. Such provisions can place a heavy burden on associates when it comes time for the associate to move on to new opportunities. Because laws governing non-competes, non-solicitation, and other restrictive covenants differ from state to state, it may be prudent for an associate to consult a local attorney to verify what restrictions, and to what extent such restrictions, may be enforceable.


If you need assistance with a Dental Associate Contract, contact the Law Office of Nicholas J. Vail today to set up a free consultation.  





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