Can I Terminate An Associate Agreement?

Whether you are an employer looking to fire an associate, or else an associate looking to leave your current position, you need to be careful in how you terminate an associate agreement. Most  associate agreements have a termination provision.  This will outline the steps you should take in order to terminate an associate agreement.  However, you should also review your associate agreement with a licensed attorney to understand your options.

Do I Have To Give Notice To Terminate Employment?

Usually, but not always.  If an associate agreement is “at will” that typically means that neither side is required to give the other side notice.  At will employment means that the employment relationship may be terminated by either side, at any time, with or without cause.  In Arizona, at will employment is the default rule. However, parties can change that through an employment agreement.  Most dentists and physicians have written associate employment agreements, but they are not mandatory.

How Much Notice Do I Have To Give?

If your associate agreement is not at will, notice typically depends on the reason for termination.  Most associate agreements allow either side to terminate an associate agreement immediately for cause.  The termination provision will also often outline the conduct that constitutes grounds for termination for cause. Most often, this includes serious issues.  For the employer, this could include failure to pay wages.  For the associate doctor, this could include criminal activity, substance abuse, or malpractice.   Associate agreements may also have a “catch-all” provision that allows the employer to terminate an associate agreement if the associate engages in other behavior that harms the practice.

For termination without cause, by either side, you typically must give notice to the other side.  The amount of notice varies by contract, but in my practice, most associate agreements require sixty days’ notice.

What Happens If I Don’t Provide Notice?

The other side may be able to sue and recover monetary damages if you do not provide enough notice to terminate an associate agreement.  For an employer, this could mean that you have to pay the employee as if they were still working through the end of the notice period.  For the employee, this could mean that you have to pay the employer the cost of finding a replacement doctor through the end of the notice period.  Many contracts also have liquidated damage provisions for employees who do not provide sufficient notice.  These can set a monetary amount of $1,000 or more a day for every day that you do not provide sufficient notice.

Liquidated damage provisions and other terms, including non-compete agreements, may not be enforceable.  Therefore, when deciding whether to enforce or challenge a decision to terminate an employment agreement, you should consult with a lawyer to evaluate your options.

If you have a questions about how termination works under your associate agreement, please feel free to contact one of our attorneys directly.

Disclaimer

This post is for informative purposes only and should not be used as a substitute for consultation with a licensed attorney. It provides general information and a general understanding of the law, but does not provide specific legal advice. No attorney-client relationship is created by the posting of this information.  If you have specific legal questions after reading this post, you should contact a licensed attorney.