Ready to Resign? Contract Sections Requiring Special Consideration
So, you’ve decided to leave your job. If you’re a physician who finished residency or fellowship in the last six years, it’s likely you’re making this decision less than two years into your first job (Jackson Physician Search, 2023). And, chances are, it won’t be the last time you make a change. Before you jump headfirst into your new job, here are four sections you should pay special attention to in your current contract.
1. Termination. If you’re switching jobs for a personal reason, like better work-life balance or to be closer to family, you should review the termination without cause section of your contract. If there is ~drama, and you believe your employer is in breach of its obligations to you, you’ll want to read the termination for cause section of your contract. Either way, the termination section will determine how much notice you need to provide your current employer before leaving. If you believe your employer has breached the agreement in some way, you will likely need to give them time to cure the breach before you can terminate for cause.
a. What’s cause? Cause will be determined and defined by what your contract states. Generally, however, cause is triggered when a party fails to fulfill its obligations under the contract, otherwise known as breach.
2. Notices. Most contracts have a notices provision, which dictates where official notices to either party should be delivered. While you may want to share the news of your resignation with your supervisor in person (a nice, personal touch that we recommend) or via email, you must also comply with the notice section of your contract, which may require you to provide written notice to the president of your medical group, the CEO, or your department chair. Such notice may also be required to be mailed and is deemed received after a certain number of days. When counting down the final days with an employer, physicians should factor in when their correspondence is deemed received.
3. Compensation. You’ll want to ensure you leave with the compensation you’re entitled to. While that will look different from contract to contract, generally, physicians should determine whether unused vacation time will be paid out. Additionally, if there is a bonus structure in your contract, you’ll want to determine whether you’re entitled to that bonus even if you are resigning before the bonus is paid. For example, if bonuses are calculated and based on work performed January to December of 2024 but are not paid out until March 2025 and you resign in February 2025, it’s important to check the verbiage in your contract to determine whether you will receive your bonus.
4. Malpractice Insurance. Finally, it’s a good idea to review the malpractice insurance section of your contract to determine whether your current employer provides an occurrence-based policy or a claims-made policy. An occurrence-based policy covers any incident that occurred during the policy period, even if the claim was filed after the policy ended. A claims-made policy covers any incident that occurs during the policy period and while the policy is active. If you’re covered under a claims-made policy, you’ll want to discuss tail coverage with your next employer or plan to factor in tail coverage as a personal expense.
Remember, when you’re ready to resign, there are two contracts involved that require careful review – your current contract and your new contract. Looping in a qualified attorney during a job transition can help.
