Employment contracts

Dear Dianne,

Dear Dianne,

I have recently moved to another state after working in the same office for 10 years. I have been interviewed in two different offices, and I’m trying to make a decision on which offer to accept. The compensation offers are almost identical. However, one doctor wants me to sign an employment contract if I accept his offer. I’ve never worked under a contract before, and something about this gives me an uneasy feeling. The office is very modern and well equipped. The non-contract office is average.

Can you give me any information about working under a contract? Is it a good or bad idea?
California Transplant

Dear CT:

An employment contract can have advantages and disadvantages. Let’s look at the issues.

The purpose of an employment contract is to set forth the terms of employment. It should include a clear job description, such as what your responsibilities are and what you can expect upon fulfilling those responsibilities. In addition to pay, the contract can also address other issues, such as:

  • The duration of the contract
  • Vacation/holiday pay
  • Personal/sick leave, or unpaid leave time
  • Compensation arrangements for continuing education
  • Uniform allowance
  • Grounds for termination
  • A method for resolving any disputes that arise

One advantage in having a contract is that everything is spelled out before the employment begins, and you have a written document, duly signed by employee and employer that binds each person to fulfill certain responsibilities. In absence of a contract, a doctor may give ambiguous statements about pay, such as, “We’ll start you at $XXX and review that in three months or so.” After the stated three-month period, the doctor may not bring up the pay issue again. That puts you in the uncomfortable position of bringing it up, at which time the doctor may state no memory of such conversation.

Another advantage is that as long as you are fulfilling your responsibilities outlined in the contract, you cannot be terminated. Any person who has endured the humility and pain of being fired will appreciate the job security afforded by an employment contract.

Additionally, an employment contract gives the employee some leverage when it is time to renegotiate the contract terms.

A fourth advantage is that employment contracts bring forth the obligation to deal fairly with employees. In legal terms, this is called “covenant of good faith and fair dealing.” In other words, if the employer does not deal fairly with the employee, the employer could be sued under this covenant. The good faith covenant is implied in any contract that gives a party broad discretion to perform or not perform, or to require the other party to perform or refrain from performing.

An interesting New Jersey court case looked at the “good faith” issue and implied contracts. The following information was obtained from www.rawle.com/reports/gsu2-7.htm.

The Appellate Court recently helped define, for the first time, New Jersey’s implied covenant of good faith and fair dealing in Wade v. Kessler Institute, A-6130-99T2, Appellate Division. In Wade, the plaintiff was an employee who alleged that her employer breached the implied covenant of good faith and fair dealing when it wrongfully discharged her without cause and without giving her the benefit of challenging the discharge through the employer’s grievance procedure outlined in an employee handbook. The jury was asked to decide: (1) whether the employee handbook represented an implied contract (entitling plaintiff to a grievance procedure before discharge and/or otherwise defining her as an employee entitled to discharge with cause); and (2) whether the employer breached the implied covenant of good faith and fair dealing in terminating the plaintiff. The jury decided against the plaintiff on the first claim and for her on the second claim.

The court first acknowledged the well-known principle that all employees are presumed to be “at-will” unless a contract exists to the contrary. In Wade, the only possible contract between the parties was an employee handbook. There was no language in the handbook that changed plaintiff’s status as an at-will employee. The plaintiff was therefore unable to point to a contract, implied or written, that required the employer to have a good cause basis for the discharge. Notwithstanding the absence of a contractual breach on point, the jury nevertheless concluded that the employer violated the implied covenant of good faith and fair dealing in terminating the plaintiff. The Appellate Court explained why the jury holdings were flawed.

One disadvantage of working under a contract may be that you may not be able to leave a job you dislike. A hygienist brings in production and is a valuable member of the dental team. In areas where hygienists are in short supply, a doctor may desire a contract to help ensure having a hygienist. A contract can lock an employee in for a specific length of time (usually one, two, or three years). Additionally, it can require that an employee give a longer notice (such as 90 days) rather than the usual two weeks.

Some employment contracts are written to give the employer great control over employees. Having such things as performance standards and grounds for termination in the contract may make it easy for the employer to terminate the employment relationship if the employee fails to live up to the standards set forth by the employer.

Another consideration is that, although the employee may feel secure with an employment contract, contracts do not ensure a happy work environment. There are no perfect jobs, and, in almost all job situations, unpleasant subtleties will surface over time. Gossiping and/or disagreeable co-workers, doctors who always run behind schedule, scheduling inequities, communication problems are just a few examples of things that can cause workplace unhappiness.

So, what should you do? You mentioned in your post that you had an “uneasy” feeling. Sometimes, something inside us tells us when a situation doesn’t feel right. You should listen to your instincts.

Personally, I would not want a contract binding me to an unhappy, stress-filled work environment. And there’s the rub - you do not know if the office is “toxic” until you actually go to work there. If you’ve locked yourself in with a contract, it’s too late to do anything about it.

However, I do not wish to imply that all contracts are negative. I am certain there are hygienists practicing under contractual agreements who are happy with the arrangements. It would be great if you could talk with a hygienist who has an employment contract and get some feedback, good and bad, about the arrangement. Experience is the best teacher. Further, if you could talk with the previous hygienist in the practice, you could get a clearer picture about the work environment.

Best wishes on finding a great practice home!
Dianne

Dianne D. Glasscoe, RDH, BS, is a professional speaker, writer, and consultant to dental practices across the United States. She is CEO of Professional Dental Management, based in Frederick, Md. To contact Glasscoe for speaking or consulting, call (301) 874-5240 or email dglasscoe@northstate.net. Visit her Web site at www.pro fessionaldentalmgmt.com.

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