Question: Our employment agreement states that a signing bonus must be repaid on a pro-rata basis if the physician does not remain employed for the initial term of the Agreement.  We have decided to terminate the agreement and the physician is claiming that because we are terminating the agreement we cannot collect this debt.  Have you ever heard of anything so ridiculous?

Answer: Yes, we are aware of claims similar to this one.  In fact, earlier this month, a court decided a similar claim.  (See Sheik v. Grant Regional Health Center (Jan. 3, 2014).)

The employer in that case provided an upfront payment to an employed physician that would be forgiven if the physician continued to be employed for two years.  The agreement also stated that this payment must be repaid if the agreement was terminated during its initial term.  The employer terminated the physician, and then demanded the repayment of the amount due.  The physician refused, claiming that by firing her, the employer rendered impossible her ability to work this amount off.

While her claim was not immediately dismissed by the court, the court eventually ruled that the terms of the Agreement were clear and the reason for termination had nothing to do with her repayment obligation.  So, the court found in the employer’s favor.

Is this case unusual?  Unfortunately, no.  Fortunately, the terms of repayment were clear in the employment agreement.  Was there another way to secure repayment?  We think so.  How?  Please join us at the Institute on Employed Physicians and Their Impact on the Medical Staff on January 23-25, 2014 in Naples, Florida, or on December 4-6, 2014 in New York City to learn how to secure repayment of this type of payment without the need to go to court – and much, much more.