Get it in writing

Get it in writing

Squash misunderstandings with written contracts and reports that show what associates are earning and how it's calculated.
Nov 01, 2007

Mark Opperman
Right now I'm watching, from the outside, a situation I hope you'll never have to experience. I'm an expert witness for a practice owner who is being sued by two former associate doctors. What caused this litigation? Poor communication and a contract written on a napkin.

One associate was employed for 25 years, the other for about five. However, after a partnership attempt failed, both associates left the practice. But that's not the problem; associates leave practices all the time. The problem is this: The associates were asked to reimburse the practice for expenses the practice had paid for them: health insurance, annual dues, and so on. This led to a closer look at what the practice had been picking up and what the associates had been paying for. The owner says the two were paid a percentage of their production, with employment costs subtracted from their compensation. The associates say they never knew this was happening. Once they found out, they demanded to be reimbursed for all the expenses that had been deducted to date without their knowledge. The owner refused and said they should have known about it all along.

The bottom line
The associates went to the state labor board and filed a complaint against the practice. In what I would consider an unusual finding, the board ruled on the owner's behalf (unusual because state labor boards normally support the employee, not the employer). The associates, still feeling they had been treated unfairly, hired a lawyer and sued the practice owner for what they believe to be deceptive practices and the compensation they think is due them. This is where I come in: I'm an expert witness for the practice owner.

At press time, this case was slated for trial in a few weeks. I don't know what the outcome will be, but I do know some of the hardship, hassles, and turmoil both parties have gone through—not to mention the money spent on both sides. The saddest part? It didn't have to happen. Both parties could have communicated better, put their agreements in writing, and shared financial information with each other.

I'm left observing a disastrous lawsuit, but the rest of you can learn from this trio's mistakes. No one should have to go through what these poor people are experiencing.

A napkin does not a contract make

The first mistake these doctors made was failing to create a written employment contract. In fact, one individual said both parties went out to dinner one night and wrote the basic compensation terms on a napkin. Of course, that napkin is now nowhere to be found.

Over the years, many veterinarians have told me that they don't need an employment contract or that someone advised them not to have one. The parties in this lawsuit would certainly disagree with that advice. A contract is nothing more than writing down what the parties have agreed on and acknowledging that by signing it. There's almost nothing to lose and everything to gain.

You can obtain boilerplate agreements from a number of sources, including my book The Art of Veterinary Practice Management (Advanstar Publications, 1999), Dr. Jim Wilson's Law and Ethics of the Veterinary Profession (Priority Press, 2002), or Work through the details, and have an employment lawyer review the agreement. For those of you who've been using an employment agreement for a while, it might be time to review the contract and make sure it's still legal and valid.