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  • Offer letter vs Contract

    Looking at some new jobs and have a couple offers.  A hospital employed position that I'm really interested in, the contract is the 1-page offer letter.  It spells out the financials and benefits, and references an employee handbook for details about malpractice, non-compete, etc.  It all sounds fairly simple, straightforward and standardized, but should I be concerned about this or ask for an actual contract?  How common is this?  It's a relatively large hospital system, and everything sounds standardized with little room for negotiation, which I'm ok with because it's a good offer all around.  The one noteworthy part is that the offer letter says that I'm employed "at-will" and not contracted employee.  I think they or I can severe ties with 90 days notice without consequences (maybe payback signing bonus depending on timing). Should I be concerned about this as well?

  • #2
    The offer left is often a summary of what the contract that is coming will be, and often times negotiation is done off the offer letter as opposed to the full contract. I would be surprised if you didn’t have a contract, as I’m sure they will want to spell out non-compete, compensation, signing bonus details, etc, and have both parties sign it.

    Also, if you don’t sign a contract, and you’re an at-will employee, you can quit or be fired with zero days notice.

    Peds answer: you will probably be getting a contract.

    Comment


    • #3
      1. Common
      2. You’ll get a full contract
      3. I wouldn’t fret on details until you see and review the full contract

      Comment


      • #4
        hard to know. i'm at a large university and we don't have contracts anymore...they did away with them maybe 6-7 years ago...the offer letter is it and has everything in it (or referenced to the university policies).  There is no expiration on the offer letters (vs like a 2 year contract) and faculty can be terminated at anytime without cause.

        what you get will likely be whatever is the norm in your area.

        Comment


        • #5
          i remain convinced that if you are working for a university and you're not someone who is going to be doing weird stuff a contract isn't that big of a deal.

          they are usually forms where your name is just written in. room for negotiation if you are a hospitalist, anesth, ER doc seems minimal to non-existent.

          in 11 years in academics i have never heard of a major contract dispute, especially not for a hospital-based specialty. if you want to leave you leave, if they want you gone they're going to find a way to do it no matter what is in your contract.

          maybe i should be more paranoid about this but i'm just not. would feel very differently about joining a small democratic group or a practice that owned a building or something like that.

          Comment


          • #6




            i remain convinced that if you are working for a university and you’re not someone who is going to be doing weird stuff a contract isn’t that big of a deal.

            they are usually forms where your name is just written in. room for negotiation if you are a hospitalist, anesth, ER doc seems minimal to non-existent.

            in 11 years in academics i have never heard of a major contract dispute, especially not for a hospital-based specialty. if you want to leave you leave, if they want you gone they’re going to find a way to do it no matter what is in your contract.

            maybe i should be more paranoid about this but i’m just not. would feel very differently about joining a small democratic group or a practice that owned a building or something like that.
            Click to expand...


            I hear what you are saying but the range of non competes is so huge that it’s difficult to know what to worry about.

            Let’s say that you can be fired without cause but there is a two year non compete that is still in force.  Let’s say the specialty is such that you have to relocate your family because the non compete prohibits you from working in a 25 mile radius of any hospital owned by the larger corporate parent.  Is that something to be worried about?

            agree that if the system wants you gone, you will be gone.  And better to go with a voluntary separation than have to write that you were fired.  Better to go without them collecting evidence supporting a firing.

             

            Comment


            • #7
              There is a difference between a Letter of Intent and an Offer Letter.
              This is the first “official” commitment.
              Your acceptance of this is your agreement to the terms.Your question about “additional items” like non-compete, repayment etc. are legitimate. You should have a list of items for clarification that do not show in the letter. The problem with references to “system policy and procedures “, is that they change and you agreed in advance. Don’t assume, simply ask how they are handled. Not every department has the same policies, some are system wide, some department, and some employee. Your point on repayment is a great example.The last thing you want is repayment of moving or signing bonus through not fault of your own as well as non-compete. A 38 page contract is not your goal. It sounds like you are comfortable with the terms, seek clarification of questions. You may get a revised letter or satisfactory explanation. The only thing that will count is a commitment in writing or email clarification your discussion. You should not “demand a contract “ but if you are asked to sign one you shouldn’t have surprises.

              It sounds like you aren’t negotiating, clarification and procedural. For example, “we don’t offer student loan repayment nor relocation and the is no non-compete. Next question.” Your reply is what is the next step?
              You sign your contract during onboarding. Can I get the template sooner? Sure, I’ll email it to you. Thanks.
              If you aren’t willing to say no, you are under their process.

              Comment


              • #8







                i remain convinced that if you are working for a university and you’re not someone who is going to be doing weird stuff a contract isn’t that big of a deal.

                they are usually forms where your name is just written in. room for negotiation if you are a hospitalist, anesth, ER doc seems minimal to non-existent.

                in 11 years in academics i have never heard of a major contract dispute, especially not for a hospital-based specialty. if you want to leave you leave, if they want you gone they’re going to find a way to do it no matter what is in your contract.

                maybe i should be more paranoid about this but i’m just not. would feel very differently about joining a small democratic group or a practice that owned a building or something like that.
                Click to expand…


                I hear what you are saying but the range of non competes is so huge that it’s difficult to know what to worry about.

                Let’s say that you can be fired without cause but there is a two year non compete that is still in force.  Let’s say the specialty is such that you have to relocate your family because the non compete prohibits you from working in a 25 mile radius of any hospital owned by the larger corporate parent.  Is that something to be worried about?

                agree that if the system wants you gone, you will be gone.  And better to go with a voluntary separation than have to write that you were fired.  Better to go without them collecting evidence supporting a firing.

                 
                Click to expand...


                that's fair but i doubt NC clauses are enforced much on hospitalists, ER docs, anesthesiologists etc.

                i could be wrong on this just haven't seen too much to make me worried.

                Comment


                • #9










                  i remain convinced that if you are working for a university and you’re not someone who is going to be doing weird stuff a contract isn’t that big of a deal.

                  they are usually forms where your name is just written in. room for negotiation if you are a hospitalist, anesth, ER doc seems minimal to non-existent.

                  in 11 years in academics i have never heard of a major contract dispute, especially not for a hospital-based specialty. if you want to leave you leave, if they want you gone they’re going to find a way to do it no matter what is in your contract.

                  maybe i should be more paranoid about this but i’m just not. would feel very differently about joining a small democratic group or a practice that owned a building or something like that.
                  Click to expand…


                  I hear what you are saying but the range of non competes is so huge that it’s difficult to know what to worry about.

                  Let’s say that you can be fired without cause but there is a two year non compete that is still in force.  Let’s say the specialty is such that you have to relocate your family because the non compete prohibits you from working in a 25 mile radius of any hospital owned by the larger corporate parent.  Is that something to be worried about?

                  agree that if the system wants you gone, you will be gone.  And better to go with a voluntary separation than have to write that you were fired.  Better to go without them collecting evidence supporting a firing.

                   
                  Click to expand…


                  that’s fair but i doubt NC clauses are enforced much on hospitalists, ER docs, anesthesiologists etc.

                  i could be wrong on this just haven’t seen too much to make me worried.
                  Click to expand...


                  Interestingly (and surprisingly), one of the universities in town has a non-compete for their radiologists for a 10-mile radius, for one year. That is highly unusual as radiologists (especially non-IR rads) generally do not have their own patients and referrals and the ability to easily take them if they leave, which would be the major justification for having a non-compete. In fact, it seems mostly punitive.

                  I am not sure if that non-compete is enforceable, but I do know of a couple of rads who bent over backwards in their next jobs, by working at far-flung satellites or picking one year jobs outside the non-compete radius before returning to a closer job.

                  Comment


                  • #10
                    Thanks for the feedback.  I'm certain I won't get a contract in the traditional sense, but I very well could get one when I start.  The head person explicitly stated that the offer letter is the contract.  The level of detail regarding compensation, bonus, non-compete, etc. seems pretty sufficient, either in the offer letter or accompanying handbook.  I'm leaning towards being ok with this, as it seems like others have had similar experiences.  The fact is that the position, offers, etc. is far better than my other options, and this system has a good rep, so I'm inclined to take a leap of faith.

                    Comment


                    • #11
                      It has surprised me how many of our financial planning clients have only an offer letter spelling out the terms (we always ask for the contract), one a cardiologist who has worked at Baylor for decades. So, you may not get a formal contract, although it's helpful as offer letters omit many details that contracts stipulate. otoh, not committing certain aspects to writing leaves the position open for flexibility for both parties.

                      I can relate that to the CPA profession. It's always document, document, document. But when it comes to an IRS audit, you may wish there were a few things you didn't document.
                      Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

                      Comment


                      • #12
                        We started with a offer letter to keep things simple but I was given a full contract when I became seriously interested.

                        Having it all spelled out in a contract is not that important until it is.

                         

                        Comment


                        • #13
                          Contracts become important for separation and divorce situations. If it’s “at-will” with 90 day notice, so be it.
                          No reason will be given, simply notice of termination with no recourse.
                          Consider the impact is not only your current position, but future. Is it reportable on your license ? How will it be perceived by future employers? Most “assume “ some type of cause without documentation of “without cause”.
                          I would suggest you consider getting a legal healthcare attorney’s advice. Current employment it may be acceptable but it could pose problems in the future.

                          Comment


                          • #14
                            We use these as well, it’s typically like the ‘promise ring’ of medicine. Sometimes physicians also like having something in their hands, which is understandable, while legal works on the official contract. That can sometimes take longer than I would hope, thus it doesn’t give the impression of lack of interest towards the physician.

                            Comment


                            • #15
                              It's typical in my area that an offer letter is signed before the contract is distributed. From what I understand, it's the practice's or hospital's way of receiving your commitment before possibly using legal resources to negotiate the contract.  The offer letters (from my experience) are vague but anything stated in it should be negotiated before being finalized (pay, vacation, CME).  Once those items are agreed upon, then usually the contract will be issued and further negotiations will take place.

                              Long story short - the offer letters don't seem to be that big of a deal.  One of my colleagues signed an offer letter, received the full contract then ended up taking another position.  They used a contract attorney throughout and there was no harm done.

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